Evidence that the housing market isn’t out of the woods yet……
by Tom on April 4, 2009
in banks, house prices
Paul Jackson has the complete story over at HousingWire.com, but there are two signs in the mortgage world that show we aren’t out of the woods……
- The delinquency rates on prime mortgages have more than doubled in the last year. As jobless rates continue to climb it’s going to continue to be harder for people to make their payments.
- The “re delinquency” rates for modified loans continues to be very high. 41% of the loans modified in the 2nd quarter are already behind “again.” That does bode well for President Obama’s big push to turn the housing market around by modifying mortgages.
It ain’t over yet folks. Far from it.
Tom Vanderwell
Prime Mortgage Delinquencies Spike: Report
Less than 90 percent of all mortgages were considered “performing” at the end of 2008, compared with 93 percent at the end of September 2008, the Office of the Comptroller of the Currency and the Office of Thrift Supervision announced Friday in a joint quarterly mortgage performance report. Although subprime mortgages (unsurprisingly) showed the highest level of serious delinquencies, prime mortgages posted the largest percentage jump — more than double — from 1.1 percent recorded at the end of March 2008, to 2.4 percent at year-end. Prime mortgages, considered the lowest risk bucket due to inherent high credit score distribution, account for two-thirds of the mortgages examined for the study.Recidivism — or re-default rates — among modified mortgages continues to represent a problem for the industry. The agencies reported that 41 percent of loans modified in the second quarter had fallen at least 60 days behind payments after eight months, a trend that “appeared to continue for loans modified during the third quarter.”
