Mortgage default rates fall back to May 2007 level

dennis-norman-st-louis-realtor-More good news on the real estate market arrived this morning in the S&P/Experian report on credit defaults which revealed that mortgage default rates on first mortgages fell to 1.41 percent in June bringing it to it’s lowest level since May 2007. This is significant as this is the “leading indicator” for foreclosures which have hammered home prices for the past 5 years plus this represents a significant decline from when the mortgage default rate peaked at 5.67 percent in May 2009. Continue reading “Mortgage default rates fall back to May 2007 level

Mortgage delinquency rate continues to fall in July

A report released this morning by Standard & Poor’s and Experian show a decrease in monthly default rates on first mortgages from 2.02 percent to 1.93 percent and a decrease in default rates on second mortgages from 1.40 percent to 1.25 percent in July. A continuing decline in mortgage delinquencies is one of the things we need to help move the real estate market into a recovery. As the delinquencies come down, so do the foreclosures eventually back to a point where they are not negatively impacting home prices to the extent they are presently. Continue reading “Mortgage delinquency rate continues to fall in July

Mortgage Defaults Increase In November

A report released this week by Standard & Poor’s and Experian showed an increase in monthly default rates on first mortgages to 3.05 percent and an increase in default rates on second mortgages to 1.80 percent.  The increase in default rates for first mortgages is the first increase since December 2009.  The good news is that even though the rate in November increased, it is still down 34.84 percent from a year ago at the same time. Continue reading “Mortgage Defaults Increase In November

Mortgage Default Rate Improves In April


Dennis Norman

I know it looks like I’m doing my second post today on the same topic, but I’m really not……my post earlier today was about the rate of mortgage delinquency, which can be defined as homeowners that are late, to varying degrees, on their house payments. This post is about mortgage default rates, which is homeowners that are over 90 days late on mortgage payments, have filed bankruptcy, are in foreclosure or on whom the lender has written off part or all of the balance of the loan. In other words these are the borrowers that, unlike the “delinquent ones” that may get current again, for the most part, are not going to recover and are likely to lose their homes. Also, now I have some data for April as well.

According to the Standard & Poor’s and Experian Consumer Credit Default Indices, we may be seeing some easing of the pain. Their report for showed that default rates for first and second mortgages declined in April which I think is significant. The other thing that is significant is the S&P/Experian Indices are not seasonally-adjusted. In my earlier post today it was pointed out that the first quarter data from the MBA that showed an increase in the mortgage delinquency rate was “seasonally adjusted”, but when they looked at non-seasonally-adjusted numbers there was a decrease in delinquency rates.

So in real-time, unadjusted numbers, we have mortgage delinquencies improving in the first-quarter of this year, followed by a decrease in the mortgage default rate in April. Maybe, just maybe, this run-away train is finally losing some steam! Another thing worth noting in the S&P/Experian report is that, while the home mortgage default rate is decreasing the credit card default rate is on the rise. This is in sharp contrast to recent months when the opposite was true…I think this shows a changing sentiment among the homeowners out there that are now focusing more on paying house payments, and keeping their homes, in advance of making credit card payments.