Despite the U.S. mortgage delinquency rate, there’s a note of optimism in the air. In the last quarter of 2010. mortgages that were past due were lower than any time since the end of 2008. That excludes homes that were already in foreclosure.
Mortgages that were one month late in the last quarter of 2010 fell to their lowest point since 2007. And an even better sign is that the percentage of loans 91 days past due and in the process of foreclosure fell. This is really an improvement in the today’s real estate market and its underlying situation. We are definitely heading in the right direction.
Part of the improvement may be tied to the tighter loan underwriting that is now a mainstay in the housing market since 2008. In the natural default cycle, we simply have it better because most loans that fall into delinquency do so within the first three years. That is why we will see a decline in the delinquency rates.
The job and unemployment rate is key to improvement. When the job market improves, the mortgage market will, too. There are good signs everywhere for the real estate market.
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