Home Mortgage Delinquencies Starting to Subside
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It appears that home mortgage delinquencies are starting to subside, providing some hope that maybe the worst of the housing market crisis really is over. The New York Times reports on the latest report of mortgage delinquencies:
The number of homeowners falling behind on their mortgage payments almost always rises with the start of winter. But late last year, the total fell slightly, the Mortgage Bankers Association said in its quarterly delinquency report.
“We’ve got fewer new problems coming into the system,” Jay Brinkmann, the group’s chief economist, said in a briefing. The improvement in the fourth quarter, he added, “frankly surprised us.”
The news doesn’t mean that we’re out of the woods, though. Mortgage delinquencies are still high, and foreclosures are mounting — even with the recent increase in mortgage lenders willing to allow homeowners to participate in short sales. The news just means that the pace is slowing in terms of problem mortgages.
Unfortunately, there remains hundreds of thousands distressed homeowners in the system, and they could still cause problems. In an effort to work toward alleviating the pressure that is already there, President Barack Obama announced last week that $1.5 billion from TARP will go to help homeowners in five of the most troubled states. Housing finance agencies will be getting the money, and directed to use it ways that should encourage solutions for underwater borrowers in an effort to stem the tide of still-rising foreclosures in some states.
Only time will tell if such programs will work. One of the problems is the fact that many homeowners are having trouble due to issues in their personal finance situations, so even these programs may be of little benefit. This is because homeowners won’t be able to make payments, no matter how small they are, due to job loss or a significant cut in hours and income.
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