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Economy in Brief

U.S. Mortgages Past Due Set Another Record
by Tom Moeller May 19,2010

Financial strains in the housing market just won't let up. The Mortgage Bankers Association reported that as of last quarter, a record 10.1% of all mortgages were late. That's up from 9.5% at the end of last year and nearly double the rate before the last recession began. Including those loans in inventory the percentage is an even higher 14.0%.

The record number of delinquencies is quite notable for those late by 90 days and over. The rise to 5.0% is up from 1.5% in 2007. For those late by 90 days or less, the figure actually is down from the peak in early 2009, though it's up since before the recession.

No category of mortgages has seen delinquencies rise more than amongst subprime borrowers. Here, more than one-quarter of the loans were past due last quarter versus 7.3% for prime loans. The largest increase has occurred for those late by more than 90 days to 15.0% of loans from 3% in 2004.

Despite the rise in delinquencies, lenders have found it more promising to renegotiate loan terms than to foreclose. As a result, the foreclosure rate has fallen to 1.2% from its high during the middle of last year of 1.5%.

The Mortgage Bankers data is available in Haver's MBAMTG database.

The minutes to the latest FOMC meeting can be found here.

Mortgage Loan Delinquency Rate (%) 1Q '10 4Q '09 3Q '09 2009 2008 2007
All Mortgages Past Due 10.1 9.5 9.6 9.5 7.9 5.8
    30-59 Days 3.5 3.3 3.6 3.3 3.5 3.2
    60-89 Days 1.6 1.5 1.7 1.5 1.6 1.2
    90 Days & Over 5.0 4.6 4.4 4.6 2.8 1.5
  Conventional Prime 7.3 6.7 6.8 6.7 5.1 3.2
  Conventional Subprime 27.2 25.3 26.4 25.3 21.9 17.3
Mortgages in Foreclosure 1.2 1.1 1.4 5.4 4.3 2.8
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