Late mortgage payments hit 3½ year high

[RamboLiberal]

http://www.msnbc.msn.com/id/17593874/

Late mortgage payments shot up to a 3½-year high in the final quarter of last year and new foreclosures surged to a record high as borrowers with tarnished credit histories had trouble keeping up with their monthly payments.

The Mortgage Bankers Association, in its quarterly snapshot of the mortgage market released Tuesday, reported that the percentage of payments that were 30 or more days past due for all loans tracked jumped to 4.95 percent in the October-to-December quarter.

That marked a sharp rise from the third-quarter’s delinquency rate of 4.67 percent and was the worst showing since the spring of 2003, when the late-payment rate climbed to 4.97 percent.

The association’s survey covers 43.5 million loans.

The percentage of mortgages that started the foreclosure process in the final quarter of last year rose to 0.54 percent, a record high. The previous high, 0.50 percent, occurred in the second quarter of 2002 as the economy was recovering from the blows of the 2001 recession.

[tanyev]

1. Pay no attention to this story. The economy is smokin'. Move along, move along.

:sarcasm:

[neverforget]

2. Right! where's there is smoke, there's fire and this could be a wildfire.

[hardcore]

4. Actually it is

4.5% unemployment obviously isn't the cause of the forclosures. It's the dumbass lending practices to people with bad credit histories.

[3waygeek]

5. What makes you think

the unemployment rate is really 4.5% -- it's closer to twice that. IIRC, the Bushies re-defined unemployment a while back.

[OhioChick]

6. 4.5% unemployment?

Do you sincerely believe everything that you're "told?"

[pokercat999]

11. Com'on oh ye of little faith, in VA we're told it's 2.7%.

Recently we ran an ad for an office clerk 35 miles from the nearest real city (boat sales on large lake). We got at least 25 calls per day for almost 2 weeks! 2.7% my ass, probably more like 27%.

[Viva_La_Revolution]

9. and how many are under-employed?

low wage or part-time when they are qualified for so much more.

add that to the real unemployment numbers (7-8%) and you have a lot of people dropping out of the middle class. :(

[Kerrytravelers]

15. Allow me to raise my hand.

I am now gainfully employed, but I had a rough patch for a while. And I have a MA.

[AlCzervik]

10. i agree, people that lose their jobs never get forclosed on and it's not like there have

been lots of huge layoffs or anything in the past few years.
:sarcasm:

[sendero]

14. Tard-core strikes..

... again. Do some research. The employment numbers, like the inflation numbers, are cooked to the point of meaninglessness.

If you have a good job, count yourself lucky and leave it at that.

[Kerrytravelers]

16. Thank you.

[hatrack]

17. Lies, damned lies and government statistics - particularly BushCo statistics

EDIT

Suggesting that the household survey is more accurate than the payroll survey, however, does not mean household survey accurately depicts unemployment. While its measures have definable statistical accuracy, the accuracy is related only to the underlying questions surveyed and to the universe of people surveyed.

The popularly followed unemployment rate was 5.5% in July 2004, seasonally adjusted. That is known as U-3, one of six unemployment rates published by the BLS. The broadest U-6 measure was 9.5%, including discouraged and marginally attached workers.

Up until the Clinton administration, a discouraged worker was one who was willing, able and ready to work but had given up looking because there were no jobs to be had. The Clinton administration dismissed to the non-reporting netherworld about five million discouraged workers who had been so categorized for more than a year. As of July 2004, the less-than-a-year discouraged workers total 504,000. Adding in the netherworld takes the unemployment rate up to about 12.5%.

The Clinton administration also reduced monthly household sampling from 60,000 to about 50,000, eliminating significant surveying in the inner cities. Despite claims of corrective statistical adjustments, reported unemployment among people of color declined sharply, and the piggybacked poverty survey showed a remarkable reversal in decades of worsening poverty trends.

Somehow, the Clinton administration successfully set into motion reestablishing the full 60,000 survey for the benefit of the current Bush administration's monthly household survey.

While the preceding concentrates on the numbers that tend to move the markets, the household survey also measures employment. The payroll survey also surveys average hourly and weekly earnings and average workweek.

EDIT/END

http://www.shadowstats.com/cgi-bin/sgs/article/id=341

Much, much more at the general web address here:

http://www.shadowstats.com/cgi-bin/sgs?

[Javaman]

25. I predict a short stay for you. :)

enjoy it while it lasts. :)

[AlCzervik]

3. when you need to borrow 100% of the asking price and then that mortgage

is adjustable--it doesn't take an economist to figure out you're in way over your head.

Shame on the lending industry and shame on some of my fellow realtors.

[Show_Me _The_Truth]

19. Shame on people for not knowing their limits.

Many of these are people who knew they were gambling on the rise of their home equity

I feel for people like the poster below who are looking for a fresh start and a decent home after credit issues. But he is probably not the one who will end up in foreclosure.

I have little sympathy for those that got in over their head by their own choice.

[AlCzervik]

20. i totally agree with you but there were so many times i was dealing with a first

time buyer that hadn't a clue literally what the process was about or even realizing they should think about things like utilities and the like, i was worried for more than a one of them and always tried to get them to buy either at their means---their legitimate one or a little below their means. There is a good deal of ignorance out there as well as greed.

[stormymonday]

7. Late payments and foreclosures on mortgages

usually peak at the end of a recession not when the economy is supposed to be growing.

This is not a good sign.

[olddad56]

8. What is the problem, our government can't service their debt to China and Japan either.

[WilmywoodNCparalegal]

12. Sometimes I feel people at DU are too judgmental

I am one of those with bad credit, due to layoffs and medical expenses. I have not bought a plasma TV screen or an SUV or gone on fancy vacations. Why shouldn't I purchase a home instead of enriching some landlord or apartment management company somewhere?

People with bad credit need mortgages too.

[Show_Me _The_Truth]

18. Yes, but you are also probably intelligent enough to know what your limits are.

You most likely are not trying to squeeze into that 6 bedroom house. Rather, you are looking for a house to call a decent home. You know you can't afford a $500,000 mortgage. Or maybe you can, I know allot of people with high salaries that have bad credit for the same reasons you do.

You are probably not going to be in the category of people who go into foreclosure.

Shame on the borrower if they are gambling in the rise in equity on their house rather than trying to just afford a house.

[InkAddict]

24. So...what are the limits for a long-term unemployed only child

in his late 50s caring for an elderly parent who only planned far enough to die quickly in his sleep at home, but who instead went deaf, got cancer, beat sepsis twice, developed renal failure requiring dialysis and assisted living, etc...

Since Y2K, the last time that life was sweet for some ITers, we've saved our home from foreclosure three times because of a long series of job losses due to everything but bad performance, but, and it's only my best guess, a predatory repuke relative saw either an advantage or family revenge in our despair and took it with both hands. That house wasn't simply an investment, it was our home, the place where we struggled together, planted flowers together, were a family together.

Now we're legally busted and the sheriff will soon be lowering the gavel on that "property". We have no more retirement savings, no more tears, and no more confidence that the nightmare will ever be over for us and for so many more who've seen their jobs sent across oceans, dropped to increase the bottom line, or for whatever excuse though it's of course nothing personal. That's where they're wrong--it's very personal. But, one must go forward!

Meanwhile, I've been job hunting without success. Think it's my age, or the fact that my field has been mostly outsourced to a foreign land, or that I was loyal too long to my previous heart-of-gold scoundrel employer who I'm pretty sure was on the verge of eliminating my position anyway.

If people would only realize how hurtful it is to see DUers making snap judgements on others' tough choices in these seemingly neverending troubled times.

[1932]

21. If you buy a house for 400K that's going to be worth 200K in 18 months

and then you default and lose your house after paying only interest (which is profit for an executive on Wall St) you would have been better off renting. You would have been enriching yourself by renting.

People with bad credit may need a loan, but the entire debt industry today (whether credit card or mortgage debt) is about draining wealth from working people and transferring it to wealthy people. It's probably wiser to stay out of debt until we get a system in place that protects the interests of working people rather than the ultra wealthy.

[jhasp]

27. Just buy one that you can afford.

That's the point. In many cases owning is cheaper than renting-just don't get in over your head.

[JPZenger]

13. Take a look at this stock chart

take a look at the stock price over the last 6 months for New Century, the second largest subprime lender.

http://finance.yahoo.com/q/bc?s=NEW&t=6m&l=off&z=l&q=l&c=

Anyone who invested in a company making predatory or "no documentation" mortgages deserves to loose their investment. Unfortunately, one of the big losers for New Century is a State pension fund.

[1932]

22. Would that be a state pension plan where the managers are Republicans who

help out Wall St executives who need to unload shares and options before they're worth nothing (like Florida, Ohio and Ct did for Enron a couple years ago?)

[melm00se]

26. "no doc" loans

take an undeserved hit in this. "no doc" loans have a place: self employed people do "no doc" loans all the time...yes, there is more risk for the lender hence the higher interest rates and, in a good business model, they should be a smaller part of the portfolio.

As to the overall sub-prime market: "it's a damned if you do, damned if you don't situation". lend money to "higher risk" people and you run the risk of losing; don't lend to the same people, you can get accused of cherry picking the market and only lending to people who don't need loans.

Look, these folks (both the sub-prime lenders and their customers) both rolled the dice - and unforutnately they came up snake eyes in (according to most numbers) about 1 in 8 times but in the bigger picture, there are 7 other families who have improved their lots in life and are moving forward toward the american dream of owning their own homes and not being beholden to a landlord.

[johnnyrocket]

23. KEEP SHOPPING! BUY STUFF! GET A GASOLINE CAR!

...this message has been brought to you by BushCo.

Keeping the economy afloat with bullshit, scams, and a little chewing gum and bailing wire.