Mortgage Delinquencies Drop 14 Percent in Past Year- More Non-Prime Borrowers Getting Home Loans

Mortgage Delinquencies (borrowers that are 60 days or more late on their house payment) declined in the 4th quarter of 2014 marking the 12th consecutive quarter of declines in the mortgage delinquency rate, according to data just released by TrasnUnion.  As the table below shows, the mortgage delinquency rate for the 4th quarter of last year was 3.29%, a decline of 2.1% from the quarter before and a decline of 14.5% from the 4th quarter of 2013.

Foreclosures and better borrowers are the reason…

Ezra Becker, vice president of research and consulting at TrasnUnion,  said the improvement in mortgage delinquencies are driven “primarily by the ongoing clearance of the foreclosure backlog” and also notes that recent borrowers “have been performing exceptionally well“.

Young borrowers show best improvement….

Although mortgage delinquencies improved for all age groups, the youngest group (age 30 and under) had the largest improvement from a year ago with the mortgage delinquency rate dropping to 2.21% for 4th quarter 2014, a 24.3% decline from a year ago when the delinquency rate was 2.92%.

More home loans to “Non-Prime” borrowers…

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Continue reading “Mortgage Delinquencies Drop 14 Percent in Past Year- More Non-Prime Borrowers Getting Home Loans

Mortgage Delinquencies Continue to Improve

Dennis Norman, St Louis REALTOR

The housing market continues to show signs of recovery, today with the report by S&P/Experian  showing that their credit default index for first mortgages fell by 12 percent in the past year and by over 20 percent (20.8%) for second mortgages during the same period.  While this may not be that exciting of a topic or seem like such a big deal to some, given the fact that mortgage delinquencies are a leading indicator of foreclosures and, over the past few years, foreclosures have pommelled some neighborhoods all but destroying home values, this is really huge from a big picture standpoint.

mortgage delinquencies

Changes in the Mortgage Industry; St Louis Mortgage Interest Rate Update

After the problems we have seen over the past few years in the real estate, mortgage and banking industries, it is not surprising we have seen significant changes in the loan process making it more challenging for a home-buyer to obtain a mortgage. Some of the changes borrowers see when they attempt to obtain a mortgage to buy or refinance a home include:

ask-the-expert Continue reading “Changes in the Mortgage Industry; St Louis Mortgage Interest Rate Update

Mortgage delinquencies increase in April;   first increase in nine months

st-louis-realtor-dennis-norman-mortgage-delinquency-foreclosure-rate

The mortgage delinquency rate (the percentage of home loans 30 or more days past due) increased in April 0.4 percent from the month before according to the latest “First Watch Report” from Lenders Processing Services (LPS). While this is a modest increase, it temporarily reverses the trend we have seen for the past 9 months of declining mortgage delinquency rates. The mortgage delinquency rate in April, at 7.12 percent of all loans, is down 10.6 percent from a year ago however. The foreclosure rate for April was 4.14 percent, the same as the month before as well as the year before so, at least the foreclosure rate is remaining flat and not increasing. Continue reading “Mortgage delinquencies increase in April;   first increase in nine months

Foreclosures and mortgage delinquencies drop in February; good news for the real estate market

st-louis-realtor-dennis-norman-mortgage-delinquency-foreclosure-rateForeclosure starts and foreclosure sales were down in February 15 and 19 percent respectively from January according to the latest Mortgage Monitor report released by Lender Processing Services, Inc. today. The report also showed that mortgage delinquencies continue to decline as well with 7.57 percent of the homes in the U.S. with a mortgage being delinquent which is down 5.0 percent from the month before.

As reported in LPS’ First Look release, other key results from LPS’ latest Mortgage Monitor report include: Continue reading “Foreclosures and mortgage delinquencies drop in February; good news for the real estate market

Mortgage delinquencies continue to decline; good news for the real estate market!

dennis-norman-st-louis-realtor-mortgage-delinquenciesThe U.S. mortgage loan delinquency rate was 7.57 percent of all home loans in February, down 5.0 percent from the month before and down 14.0 percent from a year ago, according to the “First-Look” report issued by Lender Processing Services, one of the countries largest loan servicers and aggregators of loan performance data. The foreclosure presale inventory rate was 4.13 percent in February, a 0.5 percent decrease from the month before and a 0.3 percent decrease from a year ago. Continue reading “Mortgage delinquencies continue to decline; good news for the real estate market!

Mortgage delinquencies decline; foreclosure starts accelerate

Dennis Norman

A report published by Lender Processing Services (LPS) analyzing homeowner’s performance on their mortgages as of August 2010 shows that mortgage delinquencies continue to decline however are still at very high levels versus historical norms. At the same time however, foreclosure starts continue to accelerate. Continue reading “Mortgage delinquencies decline; foreclosure starts accelerate

Foreclosures in July are 4th highest on record; delinquencies continue to decline

Dennis Norman

A report published by Lender Processing Services (LPS) analyzing homeowner’s performance on their mortgages as of July 2010 shows that mortgage delinquencies continue to decline however are still at very high levels versus historical norms. At the same time however, foreclosure starts have increased to the fourth highest level on record. Continue reading “Foreclosures in July are 4th highest on record; delinquencies continue to decline

Foreclosure and Mortgage Delinquency Rates Stabilizing

Dennis Norman

A report published by Lender Processing Services (LPS) analyzing homeowner’s performance on their mortgages as of June 2010 shows some encouraging news; there are signs that the foreclosure and mortgage delinquency rates are stabilizing, albeit at very elevated levels. Continue reading “Foreclosure and Mortgage Delinquency Rates Stabilizing

Mortgage Delinquencies Increase In May; 1 in 8 Borrowers At Risk of Losing Home

Dennis Norman

Homeowners’ mortgage delinquency rates increased in May 2.3 percent from April rising to 9.2 percent of all mortgages being delinquent. This information comes from a report issued by LPS Applied Analytics, one of the largest mortgage servicers in the U.S.

According to the report there are, as of May 31, 2010, 7.3 million home mortgages currently in some stage of delinquency. After seeing a couple of months of improvement there was a turn for the worse in May of the “deterioration ratio”, the reltionship between the number of loans going to a “worse” status for every one that has improved. In May this deterioration ratio increased to 2.5 loans getting worse for every 1 getting better.

Other highlights from the report:

  • Total U.S. Mortgage delinquency rate 9.20 percent
  • Total U.S. Foreclosure Inventory Rate 3.18 percent
  • States with the most delinquent loans and foreclosures:
    • Florida, Nevada, Mississippi, Georgia, Arizona, California, Illinois, New Jersey
  • States with the fewest delinquent loans and foreclosures:
    • North Dakota, South Dakota, Wyoming, Alaska, Montana, Nebraska, Vermont, Colorado, Iowa and Minnesota

When you really give some thought to these statistics I think you’ll find them disturbing, making even sickening, to think that almost 1 out of every 10 homeowners with a mortgage in the U.S. are delinquent on their mortgage (and ultimately at risk of losing their home) and that about 1 in every 8 borrowers are either delinquent on their mortgage or in some stage of foreclosure. So if sometimes while reading my posts you wonder why I seem somewhat negative, or even cynical, toward some of the reports about a “recovery” of the housing market, now you know why. I’m no economist but I just don’t see how we can have a housing recovery while 1 in 8 of us are either losing or at risk of losing our homes.

Mortgage Delinquency and Foreclosure Rates by State:

Source: LPS Applied Analytics

 

Not Out Of The Woods Yet; Mortgage Delinquences and Foreclosures On The Rise

1st Quarter Delinquencies; Up? Down? He said – She Said…

Mortgage Bankers Association Logo MBA

If you frequent this site, then you may recall that a little over a week ago (May 10th to be exact) I wrote a post that said the delinquency rate for homeowners mortgages had dropped in the first quarter of this year, the first drop since 2006. Now the post title says delinquencies have increased, so what gives?

Well, for one thing, different sources of information. The “good” delinquency report came from TransUnion and they get their data by doing a “random sampling” of their database of 27 million home mortgages, and then determine how borrowers are performing from that sample I assume. Today’s data comes from the Mortgage Bankers Association which, according to their report, pulls their information from 44.3 million loans which represents approximately 85 percent of all the “first-mortgage” loans in the US.

So, assuming my information is correct in terms of methodology, I would say the MBA data paints a much more accurate picture of the market, and in this case a more bleak picture.

Highlights from the MBA Report:

  • The delinquency rate for mortgage loans on one-to-four unit residential properties increased to a seasonally adjusted rate of 10.06 percent of all loans outstanding at the end of the first quarter of this year.
    • This represents an increase of 6.2 percent in the delinquency rate from the fourth quarter of 2009 and a 10.3 percent increase from a year ago.
  • Foreclosure actions were started on 1.23 percent of the outstanding loans in the first quarter of this year.
    • This is just a slight increase from the prior quarter when the rate was 1.20 percent but is a decrease of about 1 percent from a year ago.

“Seasonally Adjusted” could be the problem too:

If you ever read anything I write about real estate market stats, then you know I do not like “Seasonally Adjusted” numbers. Well, the MBA’s chief economist, Jay Brinkmann, said “the issue this quarter is that the seasonally adjusted delinquency rates went up while the unadjusted rates went down. Delinquency rates traditionally peak in the fourth quarter and fall in the first quarter and we saw that first quarter drop in the data. The question is whether the drop represents anything more than a normal seasonal decline or a more fundamental improvement. Most importantly, the normal seasonal drop is coming right at the point where we believe delinquencies could potentially be declining and the problem for the statistical models is determining which is which”.

Where we are headed:

We have TransUnion’s data showing an improvement and the MBA, non-seasonally adjusted data showing improvement as well, so perhaps this is an indicator that we are turning the corner? I think the April delinquency rates when they are published will help us see where things are headed.

 

Mortgage Delinquencies Fall in 1st Quarter; First Decline Since 2006

Dennis Norman

Consistent with the report on mortgage delinquencies from LPS that I wrote about last week, today TransUnion released it’s report on mortgage delinquencies showing they fell 1.74 percent in the first quarter of this year, which is the first quarterly decline since 2006. This is good news, however, not to rain on the parade, but we do need to remember that the 4th quarter of 2009 had a record-setting mortgage delinquency rate so to have the rate for the following quarter drop simply means, if you want to do the glass half-empty thing, this quarter didn’t set another all-time record for mortgage delinquencies.TransUnion Logo

After steadily increasing for 12 consecutive quarters, it is a welcomed relief to see the rate finally decrease to 6.77 percent (for borrowers that are 60+ days past due). This rate is still 30 percent higher than it was a year ago when it was at 5.22 percent.

Fairly consistent with the LPS report from last week, the trends reflected in this report are encouraging; while the ratio of borrowers that are 90 or more days delinquent increased for the quarter, the increases were the smallest since the fourth quarter of 2007.

Other highlights from the report:

  • Nevada continues to have the highest mortgage delinquency rate at (15.98 percent)followed by Florida (14.65 percent)
  • The lowest mortgage delinquency rates continued to be found in North Dakota (1.76 percent), South Dakota (2.44 percent) and Nebraska (2.68 percent)
  • Seventeen states showed increases in delinquency from the previous quarter with Alaska (+11.3 percent), New Hampshire (+6.3 percent) and Hawaii (+4.8 percent) leading the pack.
  • The average national mortgage debt per borrower decreased (0.47 percent) to $192,774 from the previous quarter’s $193,690. On a year-over-year basis, the first quarter 2010 average represents a 1.39 percent decrease over the first quarter 2009 average mortgage debt per borrower level of $195,500.

“The fall in mortgage delinquency is indeed good news for the consumer, the mortgage industry, and the current economic recovery,” said FJ Guarrera, vice president in TransUnion’s financial services business unit. “The February rise in the S&P/Case-Shiller home price index and the recent year-over-year increases in median existing home prices reflect the uptick in housing demand, despite the downward pressure exerted by the continual influx of foreclosures. With prices beginning to rise, increasing consumer confidence and positive trends in the equity markets, home owners who are currently upside down on their mortgages may be less inclined to join the ranks of defaulters, which have been growing in number since the summer of 2008.

“However, part of the first quarter demand for new homes was fueled by the First-Time Homebuyer Credit, which was extended to April 30, along with the provision allowing some current home owners to also qualify. Once this runs out, we could see some impact on mortgage demand and therefore home prices — all other things remaining equal. Finally, the dip in mortgage delinquencies is influenced in part by seasonal factors during the tax season, as many homeowners reap the benefits of real estate deductions — tax savings that can be used to keep current on existing mortgage obligations.”

Forecast

“Based on revised economic assumptions, which are now more optimistic than before, TransUnion believes that the 60-day mortgage delinquency rate will likely continue to drop in 2010, possibly to as low as 6.3 percent. Note that this forecast is dependent upon economic conditions, and may change if there are unanticipated shocks to the economy affecting the recovery in the housing market,” said Guarrera.

With regard to regional forecasts, Florida is anticipated to experience the highest mortgage delinquency rate by the end of 2010, reaching as high as 18.2 percent. North Dakota is still expected to continue to exhibit the lowest mortgage delinquency by year-end with a rate of 1.7 percent.

transunion-mortgage-delinquencies-1st-quarter-2010

Fewer Homeowners Falling Delinquent; More Delinquent Borrowers Bringing Payments Current

Dennis Norman

A report published by Lender Processing Services (LPS) analyzing homeowner’s performance on their mortgages as of March 2010 shows that, while foreclosure and mortgage delinquency rates are still near record levels, the pace may be slowing with fewer new loans becoming delinquent and an increase in the number of people bringing their loans current.

Fewer Borrowers Are Going From Current To Delinquent –

The dark blue line on the chart below represents the number of “new” delinquencies for each period, and as you can see, the number dropped sharply in March for people that moved from current to 30 days late. While not as big of drop, the number of borrowers going from 30 to 60 days late and 60 to 90 days late dropped as well.

lps-new-delinquencies

Source: Lender Processing Services, Inc. (LPS)

Fewer Borrowers Are Becoming Seriously Delinquent –

 

As the chart below shows, the number of borrowers that were current on their home loans as of January 1st but then were 60 or more days delinquent as of the end of March is lower this year than last year for all types of home loans, with the exception of FHA loans which are about the same as last year.

 

lps-mortgage-delinquency2

Source: Lender Processing Services, Inc. (LPS)

More Delinquent Borrowers Are Becoming Current –

The chart below shows that the number of people that were delinquent on their house payments but became current again in March increased significantly over the month before. The trend thus far this year has been good.

 

lps-curing-to-current

Source: Lender Processing Services, Inc. (LPS)

The Light At the End of the Tunnel –

If the trends above continue then I would expect in a few months we will start seeing a decline in the foreclosure rate which would be a huge step in the right direction with regard to stabilizing the housing market. Foreclosures disrupt the housing market by adding to inventory of homes for sale and bringing prices down, making it harder for an already challenged market to recover. Once the foreclosure rates start dropping, and continue trending downward we will hopefully be on our way to better times.

 

Delinquent Home Mortgages 21.3 Percent Higher Than Last Year; Foreclosure Rates at Record High

Dennis Norman

A report published by Lender Processing Services (LPS) analyzing homeowner’s performance on their mortgages as of February 2010 has some data that is encouraging but that data is overshadowed by data that shows the problems int he U.S. housing market are far from over.

Let’s start with the good news…

Delinquencies on home mortgages declined in February by 1.45 percent from January and the percentage of loans that were 90 days late or more in February were at the lowest rate in 17 months. The decline in home loans that were 90+ days delinquent from December 2009 to February 2010 was the largest decline since the same period in 2005 and 2006.

lps-mortgage-monitor-logoNow for the sobering bad news…

Mortgaage delinquencies in February were up 21.3 percent from a year ago and foreclosure inventories continue to climb to record highs. February’s foreclosure rate of 3.31 percent is an increase of 0.06 percent from January and a 51.1 percent increase from a year ago. In addition, the average days delinquent on loans 90+ days delinquent increased to 256 days, an increase of 36 percent from a year ago when the average delinquency was 188 days.

  • Total U.S. loan delinquency rate for February was 10.2 percent.
  • Approximately 1.145 million loans that were current at the beginning of January were at least 30 days delinquent as of the end of February
  • 3.8 percent of loans that were current in December 2009 in Nevada and Mississippi were delinquent as of the end of February 2010
  • 4.56 percent of loans moved to “worse” status in February vs. 2.22 percent that improved
  • For every 1 loan that improved in February in terms of delinquency, 2.1 loans deteriorated.
  • The percentage of loans that have missed 12 payments and are not in foreclosure has almost doubled in the past year.

The national average for home loans that are not current as of February is 13.5 percent. The state with the highest percentage of home loans that are not current is Florida with almost a fourth of the home loans not current (23.8 percent) followed by Nevada at 23.3 percent, Mississippi at 17.5 percent and Arizona at 16.3 percent.

lps-mortgage-delinquency

Information provided by LPS Applied Analytics

Mortgage Delinquencies Jump Over 10 Percent

Dennis Norman

Deceleration in Rise of Mortgage Delinquencies Short Lived

Back in July, 2009 when speaking in North Carolina President Barack Obama announced “we may be seeing the beginning of the end of the recession“. My thoughts then were that was very optimistic and I didn’t agree (for whatever that is worth). Since then some economists have announced the recession is officially over. Technically based upon a few bits of data the recession may be over, but for us real people that are actually living and functioning in this economy I don’t think it is over; at least not for the one market I know best, the housing market.

TransUnion LogoToday, TransUnion had more sobering news for the real estate market; the mortgage loan delinquency rate (the ratio of borrowers 60 or more days past due) increased for the 12th straight quarter, hitting an all-time national average high of 6.89 percent for the fourth quarter of 2009. The fourth quarter marks the first time the mortgage delinquency rate increase did not decelaerate after doing so in the three prior quarters.

Highlights from the fourth quarter report:

  • Mortgage delinquency rates continued to be highest in Nevada (16.19 percent) and Florida (14.93 percent)
  • Mortgage delinquency rates were lowest in North Dakota (1.84 percent), South Dakota (2.46 percent) and Alaska (2.84 percent)
  • Areas with the greatest growth in delinquency rates from the previous quarter were the District of Columbia (+20.2 percent), Louisiana (+17.7 percent) and Delaware (+14.8 percent).
  • No state showed in a decrease in mortgage delinquency rates from third quarter.
  • Average national mortgage debt per borrower increased (0.29 percent) to $193,690 from $193,121 in 3rd quarter.
  • The area with the highest average mortgage debt per borrower was the District of Columbia at $372,869, followed by California at $352,688 and Hawaii at $317,599.
  • The lowest average mortgage debt per borrower was in West Virginia at $99,028.

The Forecast for 2010 is not pretty

TransUnion is forecasting the 60-day mortgage delinquency rate to “peak between 7.5 and 8 percent over the course of 2010.” So we could be looking at an increase of anywhere from 8.8 percent to 16 percent in mortgage delinquencies from the record level they hit in the 4th quarter of 2009.

Ugh…I’m glad the recession is over, think how bad it would be if it wasn’t.

60 day mortgage delinquency chart

Source: TransUnion

Mortgage Loan Delinquencies on track to set record in 2009

Dennis Norman
Dennis Norman

TransUnion released the results of its analysis of trends in the mortgage industry for the third quarter of 2009 and the associated impact on the U.S. consumer.

Part of this report focused on delinquencies on mortgages and the rate of mortgage delinquency. The report showed that mortgage loan delinquency (the ratio of borrowers 60 or more days past due) increased for the eleventh straight quarter, hitting an all-time national average high of 6.25 percent for the third quarter of 2009, a 7.57 percent increase from the record-setting second quarter rate. Continue reading “Mortgage Loan Delinquencies on track to set record in 2009

Setting Up the Next Leg Down in Housing

Loose lending standards in government-backed mortgages is setting up the next wave of defaults and sharp declines in housing prices.

 

 

 

Charles Hugh Smith, Of Two Minds

Charles Hugh Smith, Of Two Minds

Beneath the hype that housing has bottomed is an ugly little scenario: lending standards are still loose and the low-down payment, high-risk loans being guaranteed by government agencies are setting up the next giant wave of defaults and foreclosures.

 

 

You might have thought that the near-demise of risky-mortgage mills Fannie Mae and Freddie Mac would have cooled the supply of highly leveraged government-guaranteed mortgages–but you’d be wrong, for the Feds have compensated for the implosion of the Fannie/Freddie housing-bubble machines by ramping up their other two mortgage mills: FHA and Ginnie Mae. Continue reading “Setting Up the Next Leg Down in Housing