Interest Rate Roundup

Wednesday, September 13, 2006

More on delinquencies, foreclosures

I should have mentioned in my previous post that the Mortgage Bankers Association's quarterly delinquency and foreclosures stats came out for Q2. To summarize:

* The subprime delinquency rate jumped to 11.7% in the quarter from 11.5% in Q1 and 10.33% a year earlier. Prime delinquencies were relatively flat

* However, ARM delinquencies are climbing pretty quickly. Prime ARM delinquencies hit 2.7%, a sharp rise from 2.19% a year earlier.

* Some 0.43% of the mortgages the MBA tracks started foreclosure in the quarter. That's the highest level since Q4 2004. Prime ARM loans are going into foreclosure at the fastest rate since Q3 2002.

Say what you will about the housing market overall, it's clear that subprime borrowers and ARM borrowers are finding themselves increasingly stretched. Throw in slumping to stagnant home values and you've got a recipe for more losses among exposed lenders.


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