A decade of delinquencies
Several of you asked for a visual on the foreclosure mess. Here's one -- not actually foreclosures, but the number of Maryland borrowers behind on their payments, as measured by the Mortgage Bankers Association.
The red past-due line on the chart below includes homeowners whose lenders have started foreclosure proceedings -- that's "foreclosure inventory" in the association's parlance (not to be confused with homes already foreclosed on and on banks' books). The blue line shows only those loans in the foreclosure process.
A bit of good news from the newest numbers, out Friday: Fewer people were newly delinquent -- 30 days behind -- at the end of December than at the end of September. That's true in Maryland and the nation.
Because new delinquencies usually go up at the end of the year, when people are hit by heating bills and other seasonal expenses, the mortgage bankers think that's a good sign. But no one's saying the foreclosure mess is going away anytime soon.
On a related note: U.S. Rep. Elijah E. Cummings' foreclosure prevention workshop, postponed because of snow, has been rescheduled to Feb. 20. Here's a PDF with details.
Categories: The foreclosure mess
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Comments
On the point of "foreclosure prevention workshops"... this seems far too positive a name for the reality of their function. It may serve to get more people in for counseling about reality but it won't be able to actually change that reality.
OTOH... it appears the lenders don't really care any more whether people actually pay their mortgages or not.
Where is Susan Powter when we need her? Stop the insanity!
Posted by: MrRational | February 20, 2010 4:23 PM
A 2% decline is nothing to get excited over. I suspect when the spring and summer hits that delinquency rates will continue to increase as 5 Year ARM's reset and those interest only payments turn into principal and interest. Also, the Pay Option ARM's will be devastating when they recast. This proposed new bill will not solve the problem so long as the lender can still deny the loan modification for any reason. Mediation will only delay the process. Also factor in that there are still 400k+ new unemployment claims each week and many people receiving benefits will soon see their benefits expire. The only jobs that are being "saved or created" are Government jobs, not the private sector. Once the tax credit expires and the Fed stops buying mortgages, rates will also go up and will only cause more people to become underwater on their home. That will continue the upward trend of "strategic default" as more homeowners will find themselves hopeless and unable to sell their home for more than they paid.
Posted by: Frank Rizzo | February 21, 2010 9:17 PM