More on Mortgage Delinquencies and the Shadow
by Sean Vault on March 16, 2010
in Market Musings
I got this chart from my friend, Paul Jackson, over at Housing Wire.
A couple of points that stand out on the graph:
- The number of 150+ day delinquencies is up substantially, like by 400%?
- The rest of the categories are up but not nearly as high.
- That says to me that we’re seeing a transfer of the pipeline. The same amounts are going from 30 to 60 to 90 days delinquent at a time, but the “catch all” of the seriously delinquent loans is growing. That’s not a trend that should make anyone happy.
- This says that if the current trend continues, we’ve got a big shadow inventory coming to the market.
What’s that going to do to the market?
- Most likely put downward pressure on house prices
- Most likely put increased pressure on mortgage backed securities which will lead to higher costs and tighter guidelines.
- Most likely lead to increased government intervention trying to prop the housing market higher than it should be.
It will be interesting to see……
Are you sick and tired of the lack of straight talk in the mortgage world?
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Sean Vault
Why this isn’t over – a picture is worth 1000 words….
by Tom on October 24, 2009
in Market Musings, house prices
Technorati Tags: Freddie Mac, Delinquencies
1 out of 5? Wow!
That’s right. There are 26 banks that have at least 20% of their loans that are 90 days or more past due. A couple of thoughts about that:
- Yeah, it’s only 26 banks and that’s out of how many banks in the country? A lot.
- But it’s the highest number that we’ve seen since 1991. To put that in perspective, I only had 1 and a 3 year old at home then.
- For a bank to get to the point that 20% of their loans are past due, there had to be a pretty hefty amount of sloppy underwriting and not having a solid understanding of the risks inherit in any type of lending. I think the management and loan committees at those banks might need to consider a career change?
Another sign that all is not well in the banking world…..
Tom Vanderwell
Banks With 20% Unpaid Loans at 18-Year High Amid Recovery Doubt – Bloomberg.com
Oct. 2 (Bloomberg) — The number of U.S. lenders that can’t collect on at least 20 percent of their loans hit an 18-year high, signaling that more bank failures and losses could slow an economic recovery.Units of Frontier Financial Corp.,Towne Bancorp Inc. and Steel Partners Holdings LP are among 26 firms with more than one-fifth of their loans 90 days overdue or not accruing interest as of June 30 — a level of distress almost five times the national average — according to Federal Deposit Insurance Corp. data compiled for Bloomberg News by SNL Financial, a bank research firm. Three reported almost half of their loans weren’t being paid.
Technorati Tags: Banking, Delinquencies
Why Freddie and Fannie won’t be loosening guidelines any time soon…..
Thanks to Calculated Risk for the chart!
