More Americans Falling Behind On Mortgages
More headwinds for housing market could be in store as default and delinquency rates rise
Mortgage defaults are rising again after nearly a year of trending downward, raising concerns about homeowners falling behind on their payments and undermining whatever nascent housing recovery may be under way.
First mortgage default rates rose to almost 2 percent in September and second mortgage default rates rose to about 1.3 percent over the same period, according to recent
data from S&P Indices and Experia. The uptick in defaults is the first increase since
But perhaps even more troubling are the increasing instances of mortgage delinquencies reported among the nation's largest consumer lenders.
A slew of other major banks, including Citi, JPMorgan, and Capital One, also reported rising delinquencies, the Times reported, more evidence that rock-bottom mortgage rates and government efforts are doing little to help struggling American homeowners.
"It is clear that the downward trend we saw through most of 2010 has stopped," said
That makes recent rumors of a new government-sponsored mortgage assistance program seem all the more urgent. Details remain sketchy, but state and federal officials are in talks with major banks to allow creditworthy homeowners current on their payments to refinance underwater mortgages,
Homeowners with negative equity typically aren't eligible to refinance their mortgages, but the proposal will allow homeowners who are current on their mortgage payments to do so, potentially easing the financial burden and giving consumers' budgets a break.
While this particular proposal would only affect the 20 percent of homeowners with mortgages owned by commercial banks the Journal reports -- the vast majority of mortgages today are backed by government-sponsored enterprises
Even inklings of help for the housing market seem encouraging when contrasted with the government's past policy on housing, which has been, essentially, to stand on the sidelines. Banks and big corporations have received government bailouts, but
struggling homeowners still haven't seen much aid from
Yet experts don't hold much hope for the new plan. "While this proposal is better targeted than most, it is likely to be announced as a general solution rather than the limited program that it is,"
While the Obama administration has done little for struggling homeowners,
Fellow Republican presidential candidate
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