Mortgage Market: Foreclosures Set New Record
The year I was born was the year they started keeping track of foreclosures and late payments, adding those items to list of things that help quantify the mortgage market. And May set new records in both areas. The New York Times reports on foreclosures:
The latest snapshot of the mortgage market showed that the proportion of mortgages that fell into foreclosure soared to 0.99 percent in the January-through-March period. That surpassed the previous high of 0.83 percent over the last three months in 2007.
The report by the Mortgage Bankers Association also found that more homeowners slipped behind on their monthly payments.
The delinquency rate jumped to 6.35 percent in the first quarter, compared with 5.82 percent for the three months earlier. Payments are considered delinquent if they are 30 or more days past due.
Both the rate of new foreclosures and late payments were the highest on record going back to 1979.
Despite efforts by the government to stop the foreclosures, things still appear to be on pace to continue this devastating mortgage market trend.
Because the programs instituted by the federal government are voluntary, some mortgage lenders have been dragging their feet — despite the fact that modifications to home loan terms can be to their advantage as well. After all, if the borrower can keep paying, he or she will continue to be solvent enough to make payments to the lender. If I was among the ranks of mortgage lenders, I’d be doing what I could to string the borrower along for as long as possible.
At any rate, the foot dragging may end soon. If Massachusetts succeeds in successfully implementing a plan to evaluate mortgage lenders on how they handle loan modifications, more states could follow. And that could result in fewer foreclosures in the long run.
Tags: foreclosures, mortgage market, home mortgage loan, mortgage loan blog,mortgage market trend, mortgage modifications,mortgage lenders
