How many delinquencies are on new mortgages?
As Jamie Smith Hopkins reports, mortgage delinquencies keep rising and are now occurring in a huge way among borrowers who had been rated good credit risks. Just about every category of mortgages gone bad hit a new record in the third quarter, according to the Mortgage Bankers Association. Rising unemployment is a primary cause. "Job losses continue to increase and drive up delinquencies and foreclosures because mortgages are paid with paychecks, not percentage point increases in GDP," chief economist Jay Brinkmann said in the MBA's press release.
One piece of data lacking in the survey is the vintage of the mortgages going bad -- ie., how long ago were they issued? It's relevant because even today, after all we've been through, there are reasons to question the lending standards on newly issued mortgages. Especially loans guaranteed by the FHA. As many have pointed out and as today's column notes, we're trying to solve a debt crisis by issuing more debt.
Federal Housing Administration-backed loans have soared in the last year, but the foreclosure rate on FHA loans has risen even higher! Says Brinkmann:
The foreclosure rate on FHA loans also increased, despite having a large increase in the number
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with all the foreclosed houses that still flood the market and keep falling in price.


