Mortgage delinquencies go up, foreclosures decline, according to report
The Mortgage Bankers Association (MBA) said today that the number of delinquent mortgage borrowers – those who have missed at least one payment – rose during the second quarter, CNNMoney reported.
The MBA breaks down delinquencies by degree of severity, ranging from one payment past due to 60 days late, 90 days late and loans that are in the process of foreclosure proceedings, the final step before bank repossession.
The number of loans more than 90 days late declined. Those are the mortgages that are most likely to proceed all the way to repossession.
“Delinquencies are mirroring what’s taking place in the employment market,” said Jay Brinkmann, the MBA’s chief economist.
There were other reasons for hope. There was a drop in the number of new foreclosures initiated, which means fewer borrowers are actually losing homes to bank repossessions. The nation is back to 2007 levels in that delinquency category.
Another is that the newest loans, those issued after 2007, are performing much better than those issued earlier. Mortgages originated from 2005 through 2007 represent 30 percent of all mortgages, but account for 65 percent of defaults.
Once the problems with those mortgages work through, delinquency rates should start to drop off more significantly, as long as the economy starts to pick up and hiring gains strength.