Fewer Borrowers Were Late on 4th-Quarter Mortgages
The mortgage delinquency rate in the United States dropped to 9.47 percent in the fourth quarter of 2009, and the number of borrowers only 30 days behind also took an unusual fall, compelling the chief economist of the Mortgage Bankers Association to announce that the country’s foreclosure crisis is drawing to a close.
Although the delinquency rate is still higher than it was during the fourth quarter of 2008, the fact that it decreased from the third quarter in a time when borrowers commonly pay their mortgage bills late to afford heating bills or purchase holiday presents is a positive sign, according to Jay Brinkman, chief economist for the association, on a conference call with the press this morning.
“We are likely seeing the beginning of the end of the unprecedented wave of delinquencies and foreclosures that started with the subprime defaults in early 2007…,” Brinkman commented. “It also gives us growing confidence that the size of the problem now is about as bad as it will get.”
In delinquencies and foreclosures, Michigan ranked fourth in the three-month term that ended December 31. Out of the 1.38 million loans in Michigan, 12.99 percent were 30 days late or more, while 4.56 percent were in foreclosure.
Ranking first in delinquencies is Mississippi with a 14.92-percent rate, and Florida ranks first in home foreclosures with 13.44 percent.
Mr. Brinkman reported that home loans 90 days or more past due currently account for one half of all delinquencies, which is twice the share just two years ago. The 30-day late numbers were formerly the largest portion of delinquencies, meaning fewer borrowers went into delinquency in the fourth quarter.
However, until the rate of unemployment drops, Brinkman predicts that more delinquent homeowners will enter foreclosure, as they do not have the income to pay their mortgage bills on time.
“The pattern of mortgage delinquencies now very much follows the pattern of unemployment,” he commented.