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Tag Archives: Delinquency Rate

Are We an Industry Afraid of Our Shadows?

Estimates of the industry's shadow inventory vary widely, but one thing analysts do agree on is that the overhang is massive and will likely weigh on market dynamics for years to come. Measurements of soon-to-be repossessed and foreclosed homes that have yet to hit the market range from 1.6 million to 8.2 million. Capital Economics' assessment falls in the middle of that range, and the company's analysts say if anything, theirs is probably an underestimate. They put the industry's shadow inventory at 4.3 million homes.

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Radian Sees Leveling Off in New Delinquencies and Cures

Mortgage insurer Radian Guaranty Inc. trimmed its inventory of delinquent loans during the month of October by 136, as new delinquencies and cures came close to breaking even. The company ended the month with 110,614 loans in its primary delinquent portfolio, down from 110,740 at the beginning of October. The company says it wrote $2.07 billion in new primary mortgage insurance coverage during the month of October.

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Past-Due Mortgages Up for First Time Since 2009: Report

The national mortgage delinquency rate edged up during the third quarter of 2011, marking the first increase in nearly two years, according to TransUnion. The credit bureau calculates the delinquency rate as the percentage of borrowers 60 or more days behind on their payments, excluding those that are already in foreclosure. The rate increased to 5.88 percent at the end of September. TransUnion expects the sudden upward movement to be a temporary one, driven by unanticipated financial shocks during the third quarter.

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Commercial Real Estate Exposure Pushes 11 More Banks to Insolvency

While the roots of the financial crisis can be found in the nation's residential housing sector, it's now exposure to bad commercial real estate loans that's battering banks' balance sheets. The research firm Trepp LLC has released a new report on recent U.S. bank failures and the drivers behind their demise. In total, 11 banks failed during the month of October, collectively with $617 million in nonperforming loans. Commercial real estate loans made up 65 percent of the nonperforming balance, while residential real estate was 22 percent.

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Foreclosure Starts Rise as Servicers Process Backlog of Delinquent Loans

Foreclosure starts among private-label residential mortgage-backed securities (RMBS) have been rising toward historic averages, which will lead to an influx of distressed properties bringing downward pressure to the housing market, according to Fitch Ratings. Foreclosure starts among loans that have been delinquent for six months or more have almost doubled in the past five months. Fitch says it's a sign that servicers are playing catch-up on actions that have been delayed over the past year.

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Default Risk Growing Among Jumbo Borrowers, Stabilizing for Subprime

Private investors in residential mortgage-backed securities (RMBS) comprised of jumbo mortgage loans are dealing with a greater risk of strategic defaults, according to Moody's Investors Service. The company's analysts base this assumption on the fact that jumbo RMBS have large populations of current borrowers with high loan-to-value (LTV) ratios. In contrast, the subprime sector faces the lowest potential for future performance deterioration because its weaker borrowers are already delinquent or have defaulted.

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Trepp: Slow Decline in Delinquencies Suggests Prolonged Recovery

Recording a slight decrease in delinquencies in its preliminary third quarter estimate, Trepp predicts full market recovery will not occur for years. Residential mortgage delinquencies fell 0.3 percent in the third quarter to 12 percent, according to Trepp's preliminary data. This is down 1.1 percent from last year. The research firm says the slow rate of improvement reflects the high volume of foreclosures and weak price trends that still plague the nation's housing markets.

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National Unemployment Rate Falls to 9.0%

The nation's unemployment rate slipped to 9.0 percent in October, as employers added 80,000 new jobs to their payrolls, according to the U.S. Department of Labor. Officials called the rate ""little changed,"" down from 9.1 percent the month before. The unemployment rate has remained in a narrow range from 9.0 to 9.2 percent since April. Government data shows that there are 13.9 million people out of work in the United States. Extended unemployment has become the biggest driver of mortgage delinquencies.

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Freddie Mac Requests $6B More in Taxpayer Aid

The nation's second largest mortgage company is asking the U.S. Treasury for another $6 billion in capital support after posting its largest quarterly loss in over a year. Freddie Mac says it recorded a net loss of $4.4 billion for the quarter ended September 30, 2011, after shouldering a $4.8 billion loss on derivatives and a $3.6 billion provision for credit losses related to high levels of mortgage refinancing and lower mortgage insurance recoveries. The GSE's REO operations expense skyrocketed to $221 million in the third quarter, compared to $27 million for the second quarter.

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Foreclosure Timeline Lengthened by 140 Days Over Past Year: LPS

Mortgages backing homes that were foreclosed on in September had been delinquent for an average of 624 days, according to Lender Processing Services (LPS). That's up from 484 days in September of last year. LPS says almost 40 percent of loans in foreclosure have not made a payment in two years. Modification volumes have been falling steadily since last year, but on the plus side, LPS says close to 90 percent of the mods completed over that time have reduced borrowers' payments, and as a result, redefault rates have dropped significantly.

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