According a survey of the mortgage industry which was released last Thursday, over 14% of mortgage borrowers were in trouble during the third quarter. This survey would suggest that the forecloser rates may not peak until next year, considering the unemployment rates are still rising.
The Mortgage Bankers Association who was the one conducting the survey explained that the reason for this all time high mortgage delinquencies is the unemployment. A growing portion of people who have defaulted on there mortgage loans are those who were traditionally considered creditworthy and also those whose mortgages are insured by the Federal Housing Administration.
As some economic analysts have already forecasted many times it does not look like this will improve. Jay Brinkmann, the group’s chief economist, said that from what is happening right now, the outlook was that both delinquency rates and foreclosure rates will continue to worsen before we see any signs of improvement.
Despite the massive government program to modify borrower’s mortgages and lower their payments, the foreclosure problem is still building up. Totally, 14% of 7.4 million mortgage loans were either delinquent or in the foreclosure process. This is the highest level recorded since they started in 1972. Compared to last year, this is 10% higher.
Having discovered this, it is most likely that foreclosures will reach their highest levels by the end of the year, especially if unemployment rates peak by the middle of next year. However, even if the foreclosure reach their peak next year, it may still be high up because many borrowers experience steep housing price declines and therefore owing more than the home is worth. These borrowers will continue to struggle.
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15 Responses
God has to save all these mortgage borrowers from the financial trouble.
Posted on November 20th, 2009 at 11:52 am
This whole crisis thing has a ways to go before things return to being “peachie”. I think we’re going to have to take our medicine and ride it out… and that means accepting a certain amount of collateral damage as far as mortgage foreclosures and such.
Loan modifications are so hard to get for those in trouble even thought mortgage rates are again very low. But I’m not sure even lowering your mortgage interest rate through a loan modification would help the unemployed.
Wonder if we can implement Reagonomics/Supply Side Economics to produce our way out of this mess? LOL
Posted on November 20th, 2009 at 4:31 pm
I think we will see mortgage delinquencies continue to rise. Until we focus on keeping people in their homes we may not see any progress. I guess time will tell.
Posted on November 23rd, 2009 at 8:10 pm
I would like to share something here. Just recently a friend of mine lost her job, she owns two houses. One she lives in and one was rented out. Her luck that for the past couple of months the rental was on the market. So with this unexpected lay off and no jobs out there and then this holiday season. She thought there might be some program the lenders would offer so that she can defer her mortgage payments for a few months. I totally thought so as well, She has a good credit history. Guess what? nothing! I was amazed how these lenders would rather let you go into foreclosure then trying to help you out.
Posted on December 3rd, 2009 at 3:52 pm
Delinquencies are going to continue to rise as those adjustable mortgages continue to reset. Whoever came up with those should suffer.
Posted on December 3rd, 2009 at 5:06 pm
The defauts used to result from loan resets but now people just can’t make their payments. It’s only getting worse. We should see foreclosures peak in 2010.
Posted on January 26th, 2010 at 8:14 pm
I agree…I think defaults will only increase in the future. The banks are just holding back on foreclosures so they don’t flood the market.
Posted on February 14th, 2010 at 9:39 pm
I think that it’s not about foreclosures, it’s about short sales. They are picking up steam and then should accelerate prices downward.
Posted on February 18th, 2010 at 10:02 pm
Banks are just coming to grips with short sales and are starting to do them in waves. We should see this pick up as the year progresses. Hopefully, we’ll see prices turn around at some point.
Posted on February 23rd, 2010 at 9:19 pm
I think now the shadow inventory of homes are upon us. We should continue to see more and more foreclosures. I don’t think a new home buyer credit will do much good at this point.
Posted on March 29th, 2010 at 7:23 pm
Thanks to the tax credit artificially proping up values, we should soon see the market head to new lows. Delinquencies are already rising and now a new glut of homes are hitting the market. We’ll see how low the market can go.
Posted on April 4th, 2010 at 8:00 pm
Make sure that you talk to an accountant about your situation. You need to make sure that you are educated. The tax consequences can be severe if you are unaware.
Posted on April 11th, 2010 at 7:39 pm
These delinquencies are going thru the roof. The latest stats show that 70% of Nevada homes are upside down. Thins are getting worse!
Posted on April 15th, 2010 at 3:16 pm
Now with the tax credit expiring we should see home prices go down again. I wouldn’t buy until the fall as we may see another leg to the downside. Time will tell.
Posted on April 17th, 2010 at 8:28 pm
The market will probably fall a bit now, especially with the tax credit expiring. Soon we will see another 10% drop in home prices. Let’s wait and see.
Posted on June 29th, 2010 at 9:30 pm
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