Fears over a large overhang of potential foreclosures that could threaten the housing recovery have failed to materialize — and aren’t likely to do so — according to the Mortgage Bankers Association.
More housing data is supporting that statement: The number of home owners behind on their mortgage payments or facing foreclosure dropped to a five-year low in the second quarter, according to a report released Thursday by the Mortgage Bankers Association.
At the end of June, nearly 6 percent of home mortgages were 90 days or longer past due or in the foreclosure process. That’s down from a 9.7 percent high set in late 2009, and down from 7.3 percent last year at this time.
“At a national level, all of the indicators are good. The numbers are down where they should be down,” says Brinkmann.
While the drop is welcome news to the housing industry, the share of home owners delinquent on their mortgages still remains well above historical levels. Prior to the housing boom, seriously delinquent rates averaged about 2.5 percent.
Some states — particularly those that don’t require foreclosures to go through the courts for approval — are seeing some of the biggest improvements and have returned to near pre-crisis levels. California had a foreclosure rate of 1.6 percent and Arizona’s was 1.5 percent in the second quarter. These mark a drastic improvement for these states, which once were in the top five as worst foreclosure rates in the nation during the housing downturn and now are No. 37 and 38, respectively, MBA reports.
On the other hand, judicial foreclosure states — such as Florida, New York, and New Jersey — continue to battle higher shares of foreclosures.
“If you look at where the problems are centering now, the northeast is more of a center of attention,” Brinkmann says.
Source: “Mortgage Delinquencies Hit Five-Year Low,” The Wall Street Journal (Aug. 8, 2013)
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