Mortgage Delinquencies Accelerating

Saturday, May 31, 2008 | 12:30 PM

The mortgage crisis is bad and getting worse. The latest evidence suggests that any bottom in real estate is some ways off in the future:

"Newly delinquent mortgage borrowers outnumbered people who caught up on their overdue payments by two to one last month, a sign that nationwide efforts to help homeowners avoid default may be failing.

In April, 73,880 homeowners with privately insured mortgages fell more than 60 days late on payments, compared with 39,584 who got back on track, a report today from the Washington-based Mortgage Insurance Companies of America said. Mortgage insurers pay lenders when homeowners default and foreclosures fail to cover costs.

Foreclosure filings surged 65 percent and bank seizures more than doubled in April compared with a year earlier as rates on adjustable mortgages increased, according to RealtyTrac Inc. Lawmakers and Federal Reserve officials are trying to ease the worst U.S. housing slump since the Great Depression through tax rebates, expanded federal mortgage insurance and other programs."

According to RealtyTrac, one in every 519 U.S. households is in some stage of the foreclosure process.

There is some good news amongst the dire foreclosure data: In April, a 183,000 homeowners were able to work out new borrowing terms with lenders and avoid foreclosure filings. Thats a record, according to the Hope Now Alliance.

However, that month's 54% "cure ratio'' among defaulted mortgages compares unfavorably with 80% a year earlier, and 87% in March 2008. This is mostly due to the accelerating foreclosure filings in April -- more than 243,000 properties, a 65% YoY increase (RealtyTrac).

As long as defaults are occurring faster than workouts, the supply of foreclosure properties and REOs remain at uncomfortably high levels for some time to come . . .

Foreclosure By State, April 08

via Realty Trac


New Overdue Home Loans Swamp Effort to Fix Defaults
Josh P. Hamilton and Bob Ivry 
Bloomberg,  May 30 2008

Saturday, May 31, 2008 | 12:30 PM | Permalink | Comments (7) | TrackBack (0) add to | digg digg this! | technorati add to technorati | email email this post



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Millionaire buddy just walked away from home at posh ski resort after having it on the market for nearly two years and seeing value drop from $400k above loan to about equal to loan value. Holding cost $75k/year. Gave it back to the bank and hooked them up with buyer willing to assume the 5% range loan. Lender? Wamu. "It might mess up your credit for awhile"... "I don't need credit. I don't credit"

Do you think he's the only one like that out there? I'm thinkin probably not.

Posted by: Bob A | May 31, 2008 1:09:01 PM

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