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9% of all home loans are delinquent

Original post made by Bye Bye Neighbor on Aug 20, 2009

One factor for the doos day nasty commenets on the Weekly Forum, may just be MAJOR Fear and Frustration.

9% of all home loans are delinquent
Mortgage lenders say the flood of foreclosures has not yet crested. Highwater mark should come this fall.


NEW YORK (CNNMoney.com) -- The number of Americans who have fallen at least 30 days behind on their home loan payments inched up slightly between the first and second quarters of 2009, but jumped 44% compared on an annual basis, according to an industry report.
That puts delinquencies at a record 9.24% of mortgages, according to the National Delinquency Report from the Mortgage Bankers Association (MBA) That represents more than 4 million of the 45 million borrowers covered by the report.
What the rate does not include, however, are loans already in foreclosure. Some 4.3% of all the mortgages are in that stage, up from 3.85% three months earlier and 1.55 percentage points from one year ago.
The combined percentage of loans past due and those already in foreclosure hit 13.16% during the quarter, the highest ever recorded by the MBA survey
"There was a major drop in foreclosures on subprime ARM loans," said Jay Brinkmann, chief economist for the MBA, in a prepared statement. "The drop, however, was offset by increases in the foreclosure rates on the other types of loans, with prime fixed-rate loans having the biggest increase."
Indeed, the MBA survey reported that prime, fixed-rate mortgages accounted for nearly one in every three foreclosure starts. That's way up from a year ago, when only one of every five foreclosure start involved a prime loan.
That bodes ill for the future health of the mortgage market. Prime loans make up two-thirds of the mortgage market, and if delinquencies among these mortgages continue to proliferate, the number of foreclosures will soar.
Brinkmann forecasts continued delinquency and foreclosure increases until the economy starts to recover. He predicts that job losses will peak by mid-2010, as will delinquencies, and foreclosures will start to fall about six months later.
Problem areas
The so-called "sand states" continue to contribute disproportionately to the mortgage meltdown. Four states -- California, Florida, Arizona and Nevada -- accounted for 44% of all foreclosure starts during the quarter.
"Issues related to the deteriorating economy and deteriorating home prices in those states have driven their delinquency problems]," said Brinkmann
In Florida, 12% of mortgages were somewhere in the process of foreclosure, the highest in the nation; another 5% were at least 90 days past due as of the end of June.
Adding in 30 days and 60 days past due and Florida's total delinquency rate comes to 22.8% -- almost twice the national percentage. The next highest states are Nevada at 21.3%, Arizona at 16.3% and Michigan at 15.3%. California stood at 15.2%, but because it is such a large state, that represents nearly 900,000 mortgage borrowers.
"It's hard to look at a national recovery," Brinkmann said. "We could have multiple bottoms with some markets recovering much faster than others."
First Published: August 20, 2009: 10:35 AM ET

Comments (5)

Posted by Pleasanton Parent, a resident of Pleasanton Meadows
on Aug 20, 2009 at 3:57 pm

I believe it. The market peaked in 2005. Those 5yr adjustable rate mortgages won't explode until 2010. Pair that with those on 7yr notes and I think you'll see steady foreclosures from now until the end of next year, and then slowly tapering off (assuming current conditions). The banks are being smart and slowly releasing those foreclosed homes back into the market slowly as to not tank the value.


Posted by Ben, a resident of Foothill Farms
on Aug 20, 2009 at 5:42 pm

4 million home loans are delinquent
Mortgage lenders say the flood of foreclosures has not yet crested. Highwater mark should come this fall.

One of the reasons for the lower foreclosure numbers for the last quarter was the mandate for banks to wait an additional 90 days to srart the process.

CA homes are down an avverage of more than 50% from peak value and will go down another 15-35% by the time this is done around 2013-2014.


Posted by Cali, a resident of Carlton Oaks
on Aug 20, 2009 at 5:44 pm

California is not recovering from a deep recession nor will the State for several years. It's going to get a lot worse, before it gets better


Posted by To Pleasanton Parent, a resident of Another Pleasanton neighborhood
on Aug 21, 2009 at 5:05 pm

"Those 5yr adjustable rate mortgages won't explode until 2010"

Many of those already have blown up because frequently the 5,1 ARM was a first loan, and the second loan 2 or even 1 year fixed frequently with negative amortization after that. On top of that, a lot of people have walked away from those loans already. People with 7 year and greater frequently put a lot of money down and are less likely to foreclose.


Posted by Art, a resident of Another Pleasanton neighborhood
on Aug 21, 2009 at 6:41 pm

Fast and loose money made available by a corrupt government that also spends faster than we can make it.......


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