Foreclosures Rising

-Fannie Mae officials said they expect "severe weakness" in the housing market the rest of the year and warned of increased mortgage defaults and foreclosures.

Those warnings came a day after similar warnings from Fed Chairman Ben Bernanke. On Monday he told a group at Columbia University that conditions in mortgage markets "remain quite difficult" amid a steep rise in mortgage delinquencies.

Bernanke said about one-quarter of subprime adjustable-rate mortgages are either in foreclosure or are 90 days or more delinquent. Foreclosure proceedings were initiated on around 1.5 million U.S. homes last year, he said. That's up 53% from 2006.

"And the rate of foreclosure starts looks likely to be yet higher in 2008," he said.

Meanwhile, home prices continue to sag. Through February, U.S. home prices were down 14.8% from their July 2006 peak, according to the S&P/Case-Shiller index of 20 metro areas. Fannie Mae expects national home values to fall 7% to 9% this year.

Article from Investor’s Business Daily