Serious Mortgage Delinquencies Decline — Slightly
Via Scott Reckard at the L.A. Times, two companies released national reports yesterday showing a decline in serious mortgage delinquencies, when homeowners are more than two months behind on payments.
TransUnion said that serious delinquencies fell for the first time in three years in the first quarter, to 6.77 percent from 6.89 percent of all home loans. And Fitch said that for subprime loans bundled into mortgage-backed securities, the proportion of seriously delinquent mortgages fell to 45.2 percent in April, down from 46.3 percent last month but still up from 40.1 percent a year ago.
The statistics are particularly positive because neither depends much on the Obama administration’s extraordinary interventions in the housing market, whether via the Federal Reserve’s buy-up of mortgage-backed securities or the homebuyer tax credits. (Both do, however, depend on the country’s near-zero interest rates.)
That said, a Fitch analyst warns that the fall in delinquencies might be temporary, due to tax refunds rather than improving fundamentals. It also notes that while loan modifications are picking up, helping to ease delinquencies and foreclosures, there is a strong chance of redefault on modified subprime loans.