Less Homeowners behind on Mortgages

Cited: Associated Press

There was a sharp decline of people falling behind on their mortgages in December of last year, which is a sign that may indicate the foreclosure crisis is beginning to end. This is a very interesting occurrence because if there are going to be any delinquencies it usually happens at the end of the year.

The Mortgage Bankers Association said February 19 that the percentage of borrowers who missed just one payment on their home loans fell to 3.6% in the October to December quarter, down from 3.8% in the third quarter. The decline was even more surprising because delinquencies usually rise at that time of year due to higher heating bills and holiday spending.

The new trend in late payments is significant because it means the number of people going into foreclosure will continue to decline this year. And that is important for all homeowners in areas where cheaply priced foreclosures are bringing down neighboring values.

In high-foreclosure cities like Las Vegas, Phoenix and Miami, for example, homes have lost roughly half their values from their peaks. But Friday’s report showed Nevada, Arizona and Florida had some of the biggest declines in new delinquencies.

Jay Brinkmann, the trade group’s chief economist, said the report likely marks “the beginning of the end” of the wave of mortgage delinquencies and foreclosures that started more than three years ago.

Still, more than 15% of homeowners with a mortgage have missed at least one payment or are in foreclosure, a record for the 10th straight quarter.

“The bad news is that we still have a big problem,” Brinkmann said. “The good news is it looks like it may not get much bigger.”

There will be, however, more short-term pain. Nearly half of all delinquent borrowers were at least three months behind on their payments, up from a typical level of under 20%.

Banks have prolonged the foreclosure process, traditionally between four and six months, as they evaluate borrowers for help under the Obama administration’s $75 billion mortgage relief effort. It lowers borrowers payments to as low as 2% for five years and extends loan terms to as long as 40 years.

But experts warn that hundreds of thousands of borrowers won’t be eligible or won’t complete the process. So far, only 116,300 borrowers out of about 1 million who enrolled have had the terms of their mortgages changed permanently.

The five hardest hit cities will be receiving $1.5 billion to help housing agencies spur local solutions. Those five states are Arizona, California, Florida, Michigan and Nevada.

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My Take: As someone who is trying to buy a house, this may be bad news. It would mean that the housing prices might be going back up and then I wouldn’t be able to afford my first house. As it is, the neighborhoods that houses are available in might require me to get Sacramento CA unarmed security guard.

What does it say about a neighborhood when those who live in it have to get California security guard patrol services to protect themselves and their property? It says a lot! Then again, if enough of the right people purchase houses, then the bad element will move out. At least that’s the way it should work.

There are a few homes for sale in better neighborhoods that I might be able to afford if prices don’t go up. Those are the homes that get Maryland house cleaning services on a weekly or monthly basis. You know the type of home I mean, really nice places. You would not Rockville house cleaning to take care of their dirty house.

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