Posted on: 22nd Aug, 2009 01:21 pm
Two in 15 home loans were at least one payment past due or in foreclosure at the beginning of July 2009. That is the highest combined rate since the MBA (Mortgage Bankers Association) began keeping such records in 1972.
This past Thursday, new statistics indicated that one in 11 mortgage loans (9.24 percent) were at least one month past due but not in foreclosure. That is a huge increase over last year when the delinquency rate was 6.41 percent, or about one in 15.6 mortgages.
At the beginning of July of this year, one in 23 mortgages (4.3 percent) was in the process of foreclosure. Compare that to a year earlier when the foreclosure rate was one in 36 mortgages, or 2.75 percent.
There has been a significant shift in the type of loans that are foreclosing. For a few years, subprime loans made up the lion's share of delinquencies and foreclosures. However, this past year there has been a shift towards fixed-rate loans.
Initially, the foreclosures were due to the type of loans people had (such as sub-prime). Now, the bulk of the foreclosures are due to economic conditions such as job losses or pay cuts.
There have been many foreclosure prevention policies and refinancing programs put in place over the past 18 months. These programs and policies focus on individuals whose payments have increased. They are not addressing those issues related to job losses. Even the Making Home Affordable program created by Obama cannot help those people because both Fannie and Freddie guidelines require a borrower to be employed when applying for a new loan.
Declining property values and unemployment have hit Florida homeowners hard. They have the highest rate of delinquency and foreclosure. Over 10% of mortgages were at least 30 days past due at the beginning of July. Another 12% percent were in foreclosure. That is a combined 22% of Florida mortgages that were delinquent or in foreclosure.....10 in 44. No wonder many lenders are staying away from Florida.
Nevada was not far behind with a combined deliquency rate of 21.27% .......10 in 47.
North Dakota is in the best shape with a delinquency rate of 3.76% and a foreclosure rate of 1%.
There are those who feel that foreclosures and the decline real estate market are leveling off. My opinion is there is more to come. Many borrowers out there have been laid off and received severance packages. Those packages will seen expire and will create more payment challenges out there resulting in foreclosures.
Stay tuned !!
This past Thursday, new statistics indicated that one in 11 mortgage loans (9.24 percent) were at least one month past due but not in foreclosure. That is a huge increase over last year when the delinquency rate was 6.41 percent, or about one in 15.6 mortgages.
At the beginning of July of this year, one in 23 mortgages (4.3 percent) was in the process of foreclosure. Compare that to a year earlier when the foreclosure rate was one in 36 mortgages, or 2.75 percent.
There has been a significant shift in the type of loans that are foreclosing. For a few years, subprime loans made up the lion's share of delinquencies and foreclosures. However, this past year there has been a shift towards fixed-rate loans.
Initially, the foreclosures were due to the type of loans people had (such as sub-prime). Now, the bulk of the foreclosures are due to economic conditions such as job losses or pay cuts.
There have been many foreclosure prevention policies and refinancing programs put in place over the past 18 months. These programs and policies focus on individuals whose payments have increased. They are not addressing those issues related to job losses. Even the Making Home Affordable program created by Obama cannot help those people because both Fannie and Freddie guidelines require a borrower to be employed when applying for a new loan.
Declining property values and unemployment have hit Florida homeowners hard. They have the highest rate of delinquency and foreclosure. Over 10% of mortgages were at least 30 days past due at the beginning of July. Another 12% percent were in foreclosure. That is a combined 22% of Florida mortgages that were delinquent or in foreclosure.....10 in 44. No wonder many lenders are staying away from Florida.
Nevada was not far behind with a combined deliquency rate of 21.27% .......10 in 47.
North Dakota is in the best shape with a delinquency rate of 3.76% and a foreclosure rate of 1%.
There are those who feel that foreclosures and the decline real estate market are leveling off. My opinion is there is more to come. Many borrowers out there have been laid off and received severance packages. Those packages will seen expire and will create more payment challenges out there resulting in foreclosures.
Stay tuned !!
you made a wonderful point there, eric. incomes that have been reduced (and don't think that the hit people took with retirement accounts didn't also have an effect) are having a devastating effect on how and when people can pay their bills. if you make less than you made a year ago, or two years ago, paying your obligations is going to be a lot harder. unemployment statistics take none of this into account.
thanks, eric.
thanks, eric.
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