There are recent signs indicating that the worst of the mortgage crisis might be easing. Nationwide, mortgage delinquencies have declined, however, newly initiated foreclosure proceedings have increased.
According to data released recently by the Mortgage Bankers Association, mortgage delinquencies on home loans that were 30 days or more past due or in foreclosure at the end of September were down to 13.5%. That puts an estimated 7 million households in that category. That percentage is down from last year’s figures of 14.4%, but that 13.5% recorded for September is still higher than the 10% from two years ago.
Home loans that are seriously delinquent – loans that are either in foreclosure or the borrower has missed at least three consecutive payments – declined by 8.7%. That figure is the lowest posted since the second quarter of 2009. Florida was the state with the highest percentage of seriously delinquent loans at the end of September with 19.5%. Florida was followed closely by Nevada with 17.8%, Illinois and Arizona both with 10.8% and New Jersey with 10.7%.
The foreclosure documentation mess has caused some banks to suspend foreclosure sales in 23 states across the nation. Because of this, inventories are rising in states such as New Jersey, Florida and Illinois where the banks must go through the courts to take back foreclosed properties.
Newly initiated foreclosures rose to 1.34% during the third quarter. That is a .23% increase from the 1.11% from the second quarter of 2010. This increase was related to the failure of the Obama Administration’s effort to keep people in their homes through loan modifications. Many of these newly initiated foreclosures were on prime fixed-rate mortgages, which increased to the highest levels recorded since the Mortgage Bankers Association began tracking that type of data in 1998.
The Mortgage Bankers Association figures state that prime fixed-rate loans and FHA backed loans accounted for 53% of the foreclosure starts in the third quarter. That is up from the 39% in the second quarter. This 53% is the first time that prime fixed-rate and FHA backed loans have held a majority since the crisis began.
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