6% Drop In Mortgage Delinquencies – only 13.52% of Households now Behind (but 1 out of 7 Remain Delinquent!)

[categories: Washington bankruptcy attorney]

The NY Time’s David Streitfeld reported on Friday, November 19, 2010, that mortgage delinquencies dipped from 14.42% of households to 13.52% of households. This works out to about a 6.0% reduction in mortgage delinquencies from Q2 2010 to Q3 2010, according to the Mortgage Bankers Association. http://www.nytimes.com/2010/11/19/business/19delinquent.html?

Likewise, seriously delinquent mortgages (in excess of 90-days) fell from 9.11% of mortgages to 8.7% of mortgages, a drop of some 4.5% overall.

Federal Reserve Bank governor Elizabeth A. Duke testified before Congress this week – the Federal Reserve expects 2.25 million foreclosure filings for each of 2010 and 2011. 2 million foreclosures are expected for 2012.

David Streitfeld reported: "…foreclosures are no longer being caused by bad [subprime] loans, which was the case for much of the recession. Now most foreclosures occur with prime loans, which are harder for banks to modify than subprime [loans]. Prime fixed-rate loans, the safest kind of loans, represented 36 percent of all new foreclosures in the third quarter, up from 30 percent in the third quarter of 2009. Meanwhile, the percentage of new foreclosures generated by the worst kind of loans, adjustedable subprime, fell sharply.

CHECK THIS OUT – MODIFICATIONS LARGELY A SHAM! – D. Streitfeld reported: "…only 24,000 hoseholds had gotten permanent new loans during October. It was the lowest number since the government’s Making Home Affordable Program was getting started last year. [ ] ..483,000 homeowners ahve gotten permanent new loans through the program; 719,000 enrolled in a trial but were either foreclosed or got a modification without government oversight.

I personall feel that banks seem to seek avoidance of the guidelines of the HAMP program, which recite a modification must meet certain criteria – so the banks seem to make up their own modification programs so as to avoid the strictures of the HAMP program. Accordingly, "Bank of America said that it modified 25,000 loans in October, up from 16,500 in September. Relatiely few were done through the government program." recites the NY Times’ David Streitfeld, in his 11/19 article.

D. Streitfeld quotes Michael Fratantoni of the Mortgage Bankers’ Association: The post-modification re-default rate of modified loans can be as high as 50% after the first year, another reason foreclosures are unlikely to decline significantly.

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