December 5, 2008 11:08AM
10% of Mortgages are in Trouble, But It Could Be Worse
By Ray Hennessey
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The latest numbers from the Mortgage Bankers Association are pretty nasty. Right now, 6.99% of mortgages are delinquent in some form, and 2.97% are in the foreclosure process. That means that 1 in every 10 mortgages is not being paid on time.
But the good news is that it could be worse. The foreclosure number should be higher.
There was a sharp jump in the number of mortgages that are late by 90 days or above. Typically, those move from the delinquent column to the foreclosure one. But, banks are hesitant to foreclose, so they're remaining delinquent. In short, banks should be foreclosing on these homes, but they're not.
Why? Two reasons. First is the market: the housing market is so weak that a bank doesn't get much out of foreclosing on a home and selling it. They can make more simply letting the homeowner work through the problems and wait out either the homeowner getting his act together or the market improving so that a foreclosure is more financially worthwhile.
Second is political pressure. The Feds have been pressuring banks to halt foreclosures, and many have complied. Some states have also passed laws preventing banks from foreclosing.
The situation could get worse, particularly in light of the big job losses we saw today, but, if the trend holds, look for more delinquent mortgages and a flat rate in foreclosures.
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By Steve Slater and Paul Hoskins LONDON, Nov 18 (Reuters) – Banks around the world unveiled a fresh round of profit falls, job cuts and austerity measures on Tuesday but share prices fell anew as investors remained focused on whether the
and again bad behaivor is going to be rewarded because it feels good and the people were victims and not fully informed… beesss. still people trust their brokers and elected leaders (ever check their real skills earned via real for profit and make the payroll business abilities). show me a gov entity (state, local, fed) that has downsized (real vs lets hire a contractor or consultant). just raise taxes to pay for public employees (plus consultants and contractors) to manage the issue. factually identify a gov program that has managed the issue! what is being expressed is fustration. give due rewards for performance and get the feel good/do good out of the picture. first start with tort reform, no fault insurance, reduced gov services and unbiased tests of skills before hiring anyone, and removal of 50% of gov mandated requirements. here we have a sign standard in city code and 2 full time people to enforce it (less than 30K people in city). impact fees is 30k to just start a house and builder just passes it on to buyer. no accountability of use of impact fees (check nationwide and you will see common issue). lets look at positive side. we sending money overseas and at some point the overseas will payoff the officials to just executive order the way it will be and we no longer have to think just do as told. very near to mandates on when you can do, what you can do and how you can do it. history lesson: when bad behavior is rewarded there are bad consequences. short version for thoses who do not know how to read or dont want to deal with facts or cannot deal with facts. however history does show the self sufficient survive (darwinism).
The Government isn’t putting enough pressure on Countrywide Home Loans in Nevada, because they’re not really helping anyone here. They put on the appearance of wanting to “modify” troubled mortgages, but aren’t doing anything but wasting people’s time. Many troubled mortgages that are in “workout” status right now will become foreclosures soon enough, adding to the already troubled market. No real help is materializing. I agree that this is very bad for those of us who have kept up with our mortgage payments, but creating an illusion of a workout for thousands of people is no help to anyone. It’s very sad. Countrywide is a disaster anyway, what with their problems with theft of clients’ social security numbers (and other vital info). What a mess.
maybe if they refied those who are paying into lower rates and free up some of our money we could invest in these houses. Wait rents are down because the banks will not foreclose, we can make up the difference in lower property taxes, wait we are bailing out the towns so they can keep higher taxes in place.
we are doomed first they wreck the market now they wreck the housing. If all the homes that are in foreclosure were to go then those living for free would now have to be renters. With a foreclosure they would be longterm renters and that is worth buying the homes from the banks.
Economist are usless the only people who news hire to tell the future then bring them back so they can say why they were wrong !!! Lawyers,Economist,politicians not sure how to rank !!!
10% is a drop in the bucket. If we continue on our current course, it will reach 25% and the Banks cry uncle again.
What is certain, the professional economist has no credibility today. They were wrong at the beginning and they are wrong today.
How can these jobs be created? Banks are not creating these jobs, companies are reducing, venture capital funding for high innovation start-ups has essentially stopped, angel investors are few and individual debt is so high self funding difficult. Its hard to believe that building bridges will help. If we need to build something, let’s build products.
The actual number is probably higher. Its easy to make the figures lie, depending on the viewpoint!
This entire situation mortgages, credir cards, spending more than you have for anything (fed,state,local, home) will become much worse (to include very high unemployment) before we ever see an upturn.
The people that started this loans for free business should be taken out and hung!