First Quarter Mortgage Delinquency Rate Reaches All-Time High

The combination of low lending rates and bargain prices isn’t driving sales fast enough to keep pace with the pipeline of distressed property — stalling the nation’s housing …

The combination of low lending rates and bargain prices isn’t driving sales fast enough to keep pace with the pipeline of distressed property — stalling the nation’s housing recovery. April offered hopeful signs, in terms of new delinquencies and seriously delinquent loans, but first quarter delinquency rates hit an all-time high — leaving 4 million homes in default. See the following article from Housing Predictor for more on this.

Mortgages in default and foreclosed homes account for just over 7.3-million homes, according to Lender Processing Services, the nation’s largest provider of mortgage servicing data. The widespread volume of distressed properties indicates that by any measure a full recovery in the housing market is not possible for more than a year.

Homes are selling at too slow of a rate to produce a recovery in markets for more than a year even with lower home prices and near record low mortgage rates.

The report for April released by LPS shows that there is at least some sign of an improvement in the foreclosure crisis with the number of loans 90 days or more delinquent declining 112,184 from March numbers. However, there are more than 4-million homes in default nationwide.

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But deterioration levels remain excessively high with two loans rolling to a “worse” status for every single loan that has improved and the overall volume of mortgages moving from delinquent to current status declining to a three-month low supported primarily by “artificial cures” associated with the Obama administration’s housing relief program, HAMP modifications.

Newly delinquent loans, which were current at year-end and 60 or more days late as of April have declined from 2009 levels, but still remain extremely high from an historical perspective, especially in conventional mortgages. The trend confirms that more homeowners are walking away from mortgages as the foreclosure crisis enters its fourth year.

The rate of delinquencies hit a record 10.06% in the first quarter, according to the Mortgage Bankers Association. The rate has been moving steadily upward, more than one full point higher in the last year.

Ten states hold the highest number of loans in default, in the process of being foreclosed or already repossessed by lenders: Florida, Nevada, Mississippi, Arizona , Georgia, California, Illinois, New Jersey, Michigan and Rhode Island.

States with the fewest non-current loans are in areas that were not sold many Alt-A and subprime mortgages: North Dakota, South Dakota, Wyoming, Alaska, Montana, Nebraska, Vermont, Colorado, Iowa and Minnesota.

This article has been republished from Housing Predictor. You can also view this article at
Housing Predictor, a real estate analysis and forecasting site.

 

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