mortgage crisis

Mortgage Delinquencies Drop 12.57% in February, Mean Time in Foreclosure At Record 1064 Days

The Mortgage Monitor for February (pdf) from Black Knight Financial Services (BKFS, formerly LPS) reported that there were 655,311 home mortgages, or 1.30% of all mortgages outstanding, remaining in the foreclosure process at the end of February, which was down from 659,237, which was also 1.30% of all active loans, that were in foreclosure at the end of January, and down from 1.72% of all mortgages that were in foreclosure in February of last year.

Mortgage delinquencies jump

Before a house is foreclosed on, the mortgage goes delinquent. If one leads to another then the real estate bust is about to get a lot worse.

The percentage of current and performing mortgages fell to 86.4 percent at the end of the fourth quarter of 2009, down 0.9 percent from the previous three months, marking a decline for the seventh consecutive quarter, the report by the Office of the Comptroller of the Currency and the Office of Thrift Supervision said.
The decline was attributable to a 21.1 percent jump in mortgages 90 or more days past due, to 4.7 percent of all mortgages in the portfolio at the end of 2009.

Did Anyone Hear that Warning?

I sometimes think that the stock market, many economists and policy makers forget that a huge problem still exists despite about $12 trillion of Fed/Treasury grease job. The huge problem is the housing sector and more specifically home mortgages. The huge problem is a reality and reality has a way of kicking us right in the face. There was another warning issued today. Is this warning and the warning by midtowng last week being heard?

The warning is about Option ARM. Here is the example from the Bloomberg article:

Shirley Breitmaier’s mortgage payment started out at $98 when she refinanced her three-bedroom home in Galt, California, in 2007. The 73-year-old widow may see it jump to $3,500 a month in two years.

Wall Street bailout causes mortgage rates to rise

The law of unintended consequences continues. We may save the banks at the expense of the homeowners.

The government's effort to boost bank lending to end the credit crisis is hurting one of the areas critical to the nation's recovery: mortgage rates. In the past week, the average mortgage rate on a 30-year fixed home loan has jumped more than one half a percentage point to 6.74%, according to That might not sound like much, but it is the biggest one-week rise in the normally stable lending rate in 21 years. Some economists say mortgage rates could soon top 7%, a level they have not seen in more than six years.

Obama and Subprime

While the political cheering leading goes on, you might want to read these two articles:

Subprime Obama

There's been less emphasis from the Obama campaign on the really dysfunctional role of the financial industry in the subprime mess," says Josh Bivens of the Economic Policy Institute. "Edwards and Clinton talk much more about regulation of the financial industry going forward, and to the extent that blame is placed, they tend to place it on the lenders for steering people into loans they couldn't afford.