Are things getting better on the mortgage front? From some of the recent data just published the answer is no.
In July, foreclosure filings, defined as a default notice, bank repossession, or auction sale, were up 7%. and 32% over a year earlier. This is according to Realty Trac's U.S. Foreclosure Market Report. One in every 355 homeowners had received a foreclosure filing.
Now on to more disturbing news. While the default rate for subprime borrowers is stabilizing, the rate is climbing for prime borrowers. Subprime borrowers showed an increase of 1.8% while prime borrowers showed an increase of 5.8%.
The total delinquency rate, where borrowers are late for one payment, rose to 9.4% in the second quarter, according to the Mortgage Bankers Association.
The prime borrowers have high credit scores and were able to pay their mortgage for a period of time. Many have lost their jobs, falling behind in their mortgage payments, and went into foreclosure. This is changing the nature of the foreclosure problem. In other words, the crisis is spreading rather than improving.
It is now apparent that we will not see an improvement on the foreclosure front until the job market improves. And again we see the unemployment rate rising to 9.7%, a 26-year high.
Do you believe that we will see job increases this month?
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