A (New) Record 13.16% of All Mortgages At Least 30 Days Late

Real Estate Broker/Owner

The MBA announced today in their quarterly delinquency report that a new record 13.16% of all mortgages were at least 30 days late or already in the process of foreclosure.  This was an increase from the previous record of 12.07% during the first quarter of 2009. 

The MBA's chief economist, Jay Brinkmann, was quoted as saying, "As for the outlook, it is unlikely we will see meaningful reductions in the foreclosure and delinquency rates until the employment situation improves."  His prognosis, while not unique, is cause for concern as many economists don't expect the unemployment rate to peak until mid 2010.  Banking analyst Meredith Whitney recently projected that unemployment could peak at 13%, something that would severely impact the banking system and housing market. 

With all of the talk about a housing bottom, what the housing bulls continue to overlook is that the number of homes going into foreclosure continues to outpace the demand for them.  According to RealtyTrac, foreclosure filing were up 32% year over year in July, while existing home sales were down -0.2% year over year in June.

You can't have a housing recovery when more people are losing their homes than there are people buying homes.

Comments (4)

Robert May
Robert W May - Lethbridge Real Estate - Lethbridge, AB
Real estate consulting

This is a big problem.  I have met so many people lately who are either 1 payment behind or on the verge of it.  Not in foreclosure, but sure getting close.   I don't think we have seen the majority of the damage yet.

Aug 20, 2009 04:25 PM
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Mark, it would be interesting to know if this corresponds to the areas of the country where unemployment is the highest - and again, 25% of these are strategic, right? I think you said that in one of your other posts.


Aug 20, 2009 04:31 PM
Mark MacKenzie
Phoenix, AZ

Robert:  I tend to agree with you.  Clearly there is a link between defaults and job losses.  I am yet to hear many bullish projections on unemployment numbers moving forward.  I keep hearing mid of 2010 for the unemployment rate peaking, and then these numbers will tend to lag the unemployment numbers by several months.  That could put us out until early 2011 for peak delinquency rates.  It is a significant problem.

Sharon:  I would think that there is certainly a relationship between the areas with the highest unemployment and the areas with the highest delinquency rates.  And yes, per a previous report approximately 25% of foreclosures are considered to be strategic.

Aug 21, 2009 01:07 AM
Brian Griffis
Realty Choice - Springfield, MO

Unemployment surely is one key to any market.  When people have to move for a job and can't sell their house, sure they may have to have a strategic foreclosure. 

Aug 21, 2009 02:43 AM