FORECLOSURES, MORTGAGE DELINQUENCIES WORST IN 29 YEARS!
NEARLY 10% OF U.S. HOMEOWNERS FELL BEHIND IN THEIR HOUSE PAYMENTS DURING THE FIRST QUARTER, 2008!
According to a report released last week by the Mortgage Bankers Association, the rate for late house payments and new foreclosure filings increased to its highest level since 1979. The figure includes those homeowners who are at least one month behind in their mortgage payments.
Some statistics:
6.35% of the roughly 45 million homeowners surveyed were at least one house payment past due, compared to 5.82% in the Fourth Quarter, 2007 - a nine percent jump.
During the First Quarter, 2008, 0.99% of homeowners were notified that foreclosure procedures had begun against their homes, versus 0.83% during the final quarter of last year - an increase of 19%.
In aggregate, 2.47% of all home loans were in foreclosure during this past quarter, compared to 2.04% of homes at the end of December, 2007 - greater than a 21% increase!
The type of loan (prime or sub-prime) has considerable bearing on the likelihood of the homeowner facing delinquency or foreclosure. MBA's statistics indicate sub-prime loans represent about six percent of outstanding home loans today - and represent about 39% of total foreclosures. Conventional loans, not sub-prime, comprise only 23% of those homes enduring the foreclosure process.
Late payments as a percentage of those with sub-prime loans is 22.07% of the total, up from 20.02% at the end of last year.
Recent drops in market prices for homes, in Chicago and elsewhere, have left many homeowners owing more on their mortgages than their homes are worth. This is especially true for those that purchased their homes recently, took out high-leverage mortgage loans, or sapped their equity by tapping large Home Equity Lines of Credit (HELOC's).
"The No. 1 problem is the drop in home prices," says Jay Brinkmann, Vice President for Research and Economics for the Mortgage Bankers Association. Declining prices, especially in newer-built areas, "are hurting people's ability to recover when they run into trouble—a divorce or loss of job."
For more info, see Friday's Chicago Tribune, and a story from Tribune News Services.
DEAN MOSS & DEAN'S TEAM CHICAGO
