Half-off home prices are not enough to stabilize the system. Adams is right - delinquencies now are foreclosures and short sales later. Delinquencies now can still push values down in the future. The downward spiral still has a way to go before rebound.
Dann Adams, president of U.S. Information Systems for Equifax Inc, reported that 7 percent of homeowners with mortgages were at least 30 days late on their loans in February, an increase of more than 50 percent from a year earlier.
He also said 39.8 percent of subprime borrowers were at least 30 days behind on their home mortgage loans, up 23.7 percent from last year.
"I'm trying to find optimism in these numbers, but I'm pretty hard pressed to do that," Adams said, despite a recent burst of relatively positive news that has fueled hope that the U.S. housing market has turned a corner.
But Adams said the continued increase in mortgage delinquencies revealed in his data foreshadows more foreclosures, short sales and home price declines as homeowners default and banks then repossess the homes to sell them at deep discounts.
Wednesday, April 8, 2009
Mortgage Delinquencies Up in Feb.
With the rising levels of unemployment - especially the numbers over the last few months this should not come as too much of a surprise. If you live paycheck to paycheck and the paychecks stop you are in big trouble. If all or most of your monthly income goes to pay your bills and your monthly income gets halved or more (like many NJ folks collecting unemployment) you are also in big trouble. So this Reuters article found in the Macon Daily titled Home delinquencies soar sums up the current financial state of the union. Let's take a look -