First Quarter Shows 1 Out of 7 Homes Late in Payments
According to The Mortgage Bankers Association, one out of seven homes with a mortgage, ended the first quarter late in making mortgage payments/going through foreclosure. The delinquency rate for residential one to four unit loans rose in the first quarter to an adjusted rate of 10.06%. It was 9.47% the previous quarter and 9.12 a year before that.
The number of homes in foreclosure jumped to 4.63% from 4.58% in the fourth quarter and 3.85% a year ago. Washington, Maryland, Georgia and Oregon have had the greatest increases in foreclosure starts, within the initial three months of the year, compared to the last few months of 2009.
Despite the fantastic, slowing rate of new foreclosure actions, the mountain of delinquent, and in foreclosure, loans will only dampen and prolong the housing market’s recovery. Chief Economist, Jay Brinkmann, of the MBA recently said, “…it’s like shutting off the oil leak but you still have a lot of oil in the Gulf to deal with…a bad situation that is ‘not getting worse,’ is still bad.” Despite the Obama administration’s effort to modify loan terms, foreclosures continue to pile up, as seriously delinquent mortgages, go through the process of bank repossession.
It’s interesting to note: loans 90+ days overdue, or in foreclosure, represent 68% of all “problem” mortgages. Meanwhile, a sharp change for the better in 30-day delinquency rates has been attributed to a high number of new unemployment insurance claims. As well, delinquency rates usually peak in the fourth quarter and drop in the first.
The delinquency rate, unadjusted, fell to 9.38% from 10.44% the previous quarter.
Brinkmann, in a recent statement, said, “overall, we see a continuation of the pattern of declines in short-term delinquency rates, at least on a non-seasonally adjusted basis, the continued historically high share of delinquencies that are 90 days or more past due, and a leveling off in the pace of foreclosures.”Post Tags: