Interest Rate Roundup

Wednesday, December 13, 2006

More on delinquencies and foreclosures

Lots of data out today on the credit front. In addition to the monthly RealtyTrac figures earlier, the Mortgage Bankers Association just released their QUARTERLY figures for Q3. The details:

* The overall 1-4 unit delinquency rate hit 4.67%, up from 4.44% a year earlier. Outside of the 4.7% rate in Q4 2005, which was likely due to hurricane-related DQs, this is the highest reading since Q2 2003 (4.97%). DQs hit a high of 5.35% in Q3 2001, when the U.S. economy was in recession

* Subprime DQs are rising fast -- to 12.56% in Q3 from 10.76% in Q3 2005

* ARM DQs are, not surprisingly, rising faster than fixed rate DQs. More than 3% of prime credit ARMs were delinquent. Subprime ARM delinquencies are above 13%.

* The foreclosure rate popped up to 1.05%, the highest since Q1 2005.

The MBA's survey covers 42.6 million loans, so it's a comprehensive snapshot of mortgage market performance. With prices stagnant or falling in many parts of the country, and so much "Frankenstein Financing" doled out in the past couple of years, it's likely that delinquency and foreclosure rates will rise in the months and quarters ahead.


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