Mortgage defaults jump 20 percent in Q3, double from last year

December 21, 2009–Unemployment and loss in home values has contributed to a nearly 20 percent jump in serious mortgage delinquencies from the previous quarter and has more than doubled from a year ago according to a federal report released for third quarter 2009 (September 30, 2009).

Modified loans continue to re-default at high rates overall. More than half of all modified loans re-defaulted within six months of modification, with re-default defined as 60 or more days delinquent or in foreclosure

The highest serious delinquency increase happened in the “prime” (low default risk) and “other” categories.

Option ARMs (Option Adjustable Rate Mortgages) reported 16.0 percent were seriously delinquent; and 11.9 percent were in the process of foreclosure.

U.S. government guaranteed mortgages (mostly VA and FHA) reported 8.2 percent were seriously delinquent; and 2.5 percent were in the process of foreclosure.

Of the approximate 34 million loans, 680,000 home loans were modified to avoid preventable foreclosures. Big U.S. banks and thrifts carried out 2.4 million home loan modifications, trial period plans or payment plans.

Below is a graph of quarterly results for a reference point comparison.

OCC and OTS Report for Q3 2009

Advertisements

3 Responses to Mortgage defaults jump 20 percent in Q3, double from last year

  1. As you can see from this, serious mortgage delinquencies have more than doubled from a year ago. Unfortunately, that number will continue to increase. A good way to solve that problem is be refinancing. Loan rates are still low and can solve the problem of mortgage default.

  2. Thats a lot of good information! Most people dont realize how the property type affects the loan program. As a former mortgage broker, I know most people dont purchase or refinance real estate enough to learn all the pertinent details.

  3. Andrew Pelt says:

    Thanks for the nice post. I always try to bookmark credit or finance related posts like this one.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: