The number of home owners with
severely delinquent mortgages —
90-plus days past due or in foreclosure —
fell 37 percent in May compared to its peak in January 2010, according
to a new report out by Equifax. Seventy percent of those delinquencies
are loans opened between 2005 through 2007, Equifax notes in its May
National Consumer Credit Trends Report.
"That severe mortgage delinquencies are trending downward is not
surprising given generally improving economic conditions," says Amy Crew
Cutts, Equifax chief economist. "What is surprising is that even with
the foreclosure moratoriums and the slow resolution of foreclosure
backlogs, the downward trend has been a steady, consistent drumbeat of
recovery. If this pace continues,
we expect the volume of severely
delinquent mortgage balances to return to mid-2007 levels by the end of
2014."
According to the report, severely delinquent non-agency loans have
seen the largest drops. Non-agency severely delinquent loans fell 45
percent in May to $320 million compared to its peak in January 2010 of
$580 million. Meanwhile, agency-sourced mortgages — those that are
backed by Fannie Mae, Freddie Mac, the Federal Housing Administration,
and Veterans Administration — declined 9 percent in May to $130 billion
compared to its peak in January 2010 of $142 billion.
The report also showed that mortgage write-offs have dropped 28
percent in May from their peak in 2010. Also, home mortgage balances
have fallen 12.5 percent to $8.6 trillion compared to its record-setting
$9.8 trillion reached in October 2008.
Source: Equifax
Thursday, June 28, 2012