Interest Rate Roundup

Friday, December 05, 2008

Mortgage delinquency, foreclosure rates surge to new records in Q3

The Mortgage Bankers Association just released its latest data on mortgage delinquencies and foreclosures, covering the third quarter of this year. Without further adieu, here's a look at the numbers:

* The overall mortgage delinquency rate rose again to 6.99% from 6.41% in Q2 2008 and 5.59% a year earlier. This is yet another record high for the delinquency rate (the MBA data goes back to 1979).

* The subprime DQ rate resumed its rise -- climbing to 20.03% from 18.67% in Q2 2008 and 16.31% a year earlier. This is a fresh high. And as I have noted several times, this mortgage crisis stopped being just about subprime long ago. The prime-only delinquency rate rose to 4.34% from 3.93% in Q2 2008 and 3.12% a year earlier.

* Delving further into the numbers, Prime ARM DQ rates rose to 8.2% from 7.49% in Q2 2008, while subprime ARM DQs climbed a bit to 21.31% from 21.03%. Meanwhile, the DQ rate on FHA loans inched up to 12.92% from 12.63% a quarter earlier.

* The percentage of mortgages entering the foreclosure process dipped ever so slightly -- to 1.07% from 1.08% a quarter earlier. But the overall percentage of mortgages in any stage of foreclosure rose again to 2.97% -- up from 2.75% in Q2 2008 and 1.69% a year earlier. A whopping 12.55% of subprime mortgages are now in some stage of foreclosure.


  • Mike, I know you rarely respond to comments but I am curious to know you thoughts on the markets inexplicable rise as news gets worse. The more horrible the news the better. Companies are literally coming out losing 5x's estimates announcing worse results next year and canceling forecast and the stocks are going up.(home builders) Does this kind of price action indicate anything? As you and others seem to lay this out, it seems so clear. The market disagrees. Is it possible there is something we are missing? I apprecitate your commentary.

    By Anonymous Anonymous, at December 5, 2008 at 2:45 PM  

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