Tag Archives: Delinquency Rate

Residential mortgage foreclosure rates continue to fall in Texas, dropping to 1.89 percent during the first quarter of 2011 - well below the national average of 4.52 percent. The Lone Star State now has the sixth lowest foreclosure rate in the country. Mortgage bankers in the state say the numbers provide further evidence that Texas has one of the best lending landscapes in the country.

According to data released by S&P Indices and Experian, the default rate on second lien mortgages has increased for the first time in at least five months. The agencies' report shows second mortgage defaults rose from 1.42 percent in March to 1.51 percent in April. First mortgages, on the other hand, saw a decrease in default rates. These results are based on data extracted from Experian's consumer credit database, which covers approximately $11 trillion in outstanding loans sourced from 11,500 lenders.

The nonprofit counseling agency CredAbility released the results of its first-quarter Consumer Distress Index Thursday. While the average U.S. household is still in financial distress - and has been for 10 consecutive quarters - the agency says the index has hit its highest score in two and a half years. CredAbility attributed the positive movement to the fact that employment levels rose and consumers now have a better handle on managing household budgets. On the flip side, the score dropped in the housing category.

Industry data released Thursday shows a sharp drop in the percentage of home loans 90 or more days past due or in foreclosure. The Mortgage Bankers Association (MBA) reports 90-plus day delinquencies have dropped for five straight quarters, while the nation's foreclosure inventory recorded its largest decline since the trade group began tracking the market. At least one economist says the combination is a sign of ""genuine improvement."" Remaining troubles appear to be concentrated in a handful of states. Five account for over half of the loans in foreclosure in the country.

Loans backing commercial mortgage-backed securities (CMBS) that were liquidated at a loss in the first quarter carried an average loss severity of 38 percent, according to Moody's Investors Service. That figure represents a decline from 40 percent for the previous quarter and was the first reduction in the severity of losses since the fourth quarter of 2008. During the month of April, CMBS loans totaling $2.9 billion became newly delinquent, while previously delinquent loans for $3.0 billion became current, worked out, or were liquidated.

Lender Processing Services (LPS) says market data it's pulled through the end of April reveals an increase in the national mortgage delinquency rate and a drop in the industry's foreclosure inventory. Both stats did a complete u-turn from the trajectory they were on the prior month. LPS says the ratio of mortgages 30 or more days past due but not yet in foreclosure rose to 7.97 percent in April, while properties in the midst of the foreclosure process declined to 4.14 percent.

The share of mortgage borrowers in the United States 60 or more days behind on their payments dropped to 6.19 percent at the end of the first quarter of 2011, according to data released Monday by the credit bureau TransUnion. That's down from 6.41 percent at the close of 2010 and marks the fifth consecutive quarter that TransUnion has reported an improvement in the national delinquency rate. The firm says as home prices have declined further, delinquencies were expected to remain flat or at least slow in their decline, but that hasn't been the case.

Delinquencies and losses on commercial real estate loan collateralized debt obligations (CREL CDOs) increased notably in April, according to the latest U.S. CREL CDO index results from Fitch Ratings. Asset managers reported approximately $164 million in realized losses from the disposal of defaulted and credit-impaired assets, which is substantially higher than March's total of $73 million. The agency says many of the realized losses stemmed from foreclosure or deed-in-lieu actions that wiped out subordinate positions.

Freddie Mac's economists see some positive signs for housing in terms of affordability and low mortgage rates, but extended unemployment dampens the forecast. The average duration of unemployment was just over 38 weeks in April. The GSE says the large number of workers unemployed for a long period remains the predominant force behind seriously delinquent mortgages. According to Freddie Mac, the economy needs to add over 250,000 new jobs per month, on a sustained basis, to reabsorb all the jobs lost since the recession.

Recent news has highlighted the severity of the renewed downturn in home prices, but Capital Economics says although condominiums will not escape altogether, over the next year or so condo prices are likely to fall by less than their single-family counterparts. The research firm notes that demand for condos is currently stronger than demand for single-family homes, due to cash buyers and investors seeking rental income. The condo market also boasts a lower delinquency rate, which suggests fewer foreclosed properties will support the supply of condos.