Is the Mortgage Market on the Mend?
According to the MBA delinquency survey, the delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 8.32 percent of all loans outstanding as of the end of the first quarter of 2011, an increase of seven basis points (0.07 percent) from the fourth quarter of 2010.
But the better news is that the number of homeowners who are delinquent on their mortgage decreased 174 basis points (1.74 percent) from one year ago. The non-seasonally adjusted delinquency rate decreased 117 basis points to 7.79 percent this quarter from 8.96 percent last quarter.
According to the report, the combined percentage of loans in foreclosure or at least one payment past due was 12.31 percent on a non-seasonally adjusted basis, a 129 basis point decline from 13.60 percent last quarter.
While this doesn't sound like a huge decrease, MBA chief economist
The rate of borrowers who are less than 90 days late on their mortgage (known in street parlance as a "short-term" delinquency) remain at pre-recession levels, Brinkmann said. Moreover:
-- The number of borrowers who are 90 days or more delinquent on their mortgage payments has dropped for five straight quarters and is at the lowest level since the beginning of 2009.
-- Foreclosure starts are at the lowest level since the end of 2008 and had the second largest drop ever.
-- The percentage of loans somewhere in foreclosure is down from last quarter's record high and also had one of the largest drops we have ever seen, although the reasons for the drop will differ from market to market.
Brinkmann noted that loans originated between 2005 and 2007, at the height of the real estate market, showed particular improvement.
"These are the loans that drove the mortgage market collapse and now represent about 31 percent of loans outstanding but 65 percent of the loans seriously delinquent. Given that loans originated during this period are now past the point where loans normally default, and that loans originated since then generally have better credit quality, mortgage performance should continue to improve," he said.
While it's interesting to look at the national statistics, real estate is driven entirely by local business and market conditions. Local economies drive home value, since it's tough to pay the mortgage if you don't have a regular paycheck coming in. But beyond having dollars in their pockets, whether homebuyers or someone they know have been hurt by the Great Recession "determines values and peoples' perception of values," Brinkmann added.
According to the survey, some states are still in trouble:
-- Twenty-four percent of all mortgages in the country that are in foreclosure are in
Yet Brinkmann noted that 38 states have foreclosure rates that are below the national average. "We have areas of recovery but those numbers are often overwhelmed by the bad numbers still coming out of a few large states," he said.
"Finally, we need to recognize the increasing divergence in market recovery attributed to differences in states' laws. The states with the biggest increases in the number of loans in foreclosure are
What differentiated those with increases in the percentage of loans in foreclosure?
"The impact, however, of individual state judicial foreclosure laws in keeping the number of loans in foreclosure elevated in some states, and thus keeping high the potential overhang of housing inventory in those states, is not a national issue, even though it increases the national foreclosure numbers," Brinkmann said.
- The Challenges of Investing in Foreclosures
- How More Homeowners Are Making Their Existing Homes Work
- Is the Mortgage Market on the Mend?
- Why Declining Homeownership Rates Might Not Be a Bad Thing
- The Market for Jumbo Mortgages Is Changing
- Overcoming the Mortgage Obstacles
- Homeowner Savings Tips: What You Might Not Know
- What Home Inspectors Don't Notice
- Buying Beats Renting in 80 percent of U.S. Cities
- What Moves Mortgage Rates?
- Why We're Shunning the McMansion
- The Ultimate Spring Home Buyers Guide
- HUD Drops Harsh Rule on Reverse Mortgages
- Borrowers Have to Jump Through Maddening Hoops Just to Close
- Before Taking a Reverse Mortgage You Need to Know the Costs
- Why the World Caught a Cold When the U.S. Housing Market Sneezed
- HED Reverse Mortgages
- Rising Number of Reverse Mortgage Borrowers Facing Foreclosure
- Now May Be the Time to Buy a Home
- 10 Winter Wonderlands for Retirement
- What Mortgage Lenders Look For When They Scrutinize Your Finances
- Five Things You Should Know About Foreclosure in 2011
- Property Taxes Might Be Higher Than You Thought Before Purchase
- New Year's Resolutions for Home Sellers
- What Lenders Mean by 'Loss Mitigation'
- New Year's Resolutions for Home Buyers
- Decoding the FICO 8 and FICO 8 Mortgage Score
- Why It's Time to Reconsider House-Hunting
- Jobs and Real Estate Tethered for Better or Worse
- Not Wise to Order Your Own Appraisal Before Refinance
- Foreclosure Process In Deep Crisis; Is Government Finally Noticing?
- How Much Should You Pay to Refinance?
- Interest Rates Drop Again But Will Housing Market Perk Up?
- On Sale: Retirement Havens
- Appraisal Problems Kill Opportunity For Lower Mortgage Rate
- Our Big Fat Foreclosure Mess
- What to Expect When You're Closing on Your Mortgage Loan
- Shopping for a Home When There's Too Much to Buy
- Finding Second Home Bargains
- America's 10 Slowest Appreciating Housing Markets
- The Costs of Retiring with a Mortgage
Real Estate - Is the Mortgage Market on the Mend?
(c) 2011 ILYCE R. GLINK. DISTRIBUTED BY TRIBUNE MEDIA SERVICES, INC.