Although many economists predict the recession will be ending soon, there is still a staggering number of unemployed Americans who are fueling the rise of foreclosures. More than 8% of homeowners were delinquent on their mortgage in May, a staggering number that could lead to many more foreclosures. Diana Golobay from HousingWire reports on the latest numbers.
Total mortgage delinquencies are up 50% from the year-ago level and up 5% from the previous month, reaching an 8.49% rate in May, according to a monthly report released by Lender Processing Services.
Foreclosure inventories climbed as May saw a 2.79% increase in the foreclosure rate from April. The foreclosure rate sits 88.3% above the year-ago level.
The roll rate of loans moving from current status into delinquency rose again in the month to 637,822 newly delinquent loans, the fourth highest number on record. Ninety-day delinquencies rolling into foreclosure status edged up again after falling in April on the heels of an influx in foreclosure starts that followed the expiration of the moratorium in place at the agencies.
New delinquencies increased across all product types, spiking among government-insured mortgages — including those insured by the Federal Housing Administration — which now sits at a level even with option adjustable-rate mortgages and just below Alt-A mortgages.
The percentage of mortgages becoming 30 days delinquent each month this year sat above the corresponding monthly rate in the four preceding years, indicating a greater percentage of borrowers missing payments as the current economic contraction continues to unwind and joblessness increases, slashing income and making monthly payments more challenging to keep up with.
The current-to-30-day-delinquency roll rate seen in May is higher than that seen in the same month in the last four years. It’s the fourth-highest current-to-30 roll rate on record, behind September ‘07, August ‘08 and November ‘08.
This article was reposted from HousingWire. You can view this article at HousingWire, a mortgage finance news site.
