2012 Mortgage Delinquencies Seen Dropping Sharply

[Purveyor]

Source: ASSOCIATED PRESS

(12-07) 07:05 PST New York (AP) --

If the U.S. economy does not suffer more setbacks, the rate of mortgage holders behind on their payments should decline significantly by the end of next year, according to credit reporting agency TransUnion.

Mortgage delinquency rates — the ratio of borrowers 60 or more days behind on their payments — will likely tick up to about 6 percent through the first three months of 2012, TransUnion said in its annual delinquency forecast issued Wednesday.

But by the end of next year, it could drop to 5 percent, TransUnion said. That's well off the peak of 6.89 percent seen in the fourth quarter of 2009.

Chicago-based TransUnion's forecast takes into consideration several factors, including expectations that consumer confidence and the economy will improve next year.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2011/12/06/national/a210622S66.DTL

[Mojorabbit]

1. old old chart I post periodically

[Hosnon]

2. According to that chart, we're through the worst of the Option ARM storm. nt.

[dmallind]

5. And as I mentioned when I first saw it

ARM resets at a time of the lowest mortgage rates in decades are not to be feared by the vast majority who were and are paying on time.

[Mojorabbit]

7. Unless most are underwater and the banks

don't want to refinance the loan.

[dmallind]

8. ARM or refi? Two different things

ARMS aren't refinanced every time they reset, and at no time were anything approaching "most" mortgages underwater.

[Mojorabbit]

10. I was under the impression that when time came to reset

if more owed than house is worth, redoing the financing would be difficult? I have a low
fixed on my house so am not an expert on the financing angle.
Here in Fl we have 50 percent of mortgages underwater. It was a huge building and flipping
of homes that went on here. There are for sale signs everywhere.

[Myrina]

3. Logical considering pretty much the only people still in houses are

.... the ones who never had problems covering the mortgage to begin with ...


:shrug:

[dmallind]

4. PEAK of less than 7% fell behind nt.

[Zorra]

12. *1

[jtuck004]

6. That's like telling someone who is bleeding that it will stop soon,

because all their blood will be drained.

[dmallind]

9. And how many do you think are behind ("bleeding")?

As the link states - the vast majority of mortgages are current, and always have been. Delinquencies IIRC never got above 10% and foreclosures even lower. The much "doom-sexier" "underwater" rate is at less than 22%, and of course that only matters if you need to sell.

The mortgage crapola is indeed a deep hole, and is miserable for those unfortunates caught in it, but it's important to remember that the vast majority of mortgage borrowers are paying on time, and have substantial equity in their homes. The idea that any decrease in delinquencies is only because everybody is already delinquent is both utterly wrong and insulting to the huge majority of us who are up to date and solvent.

[jtuck004]

15. I was referring to the 2.9 million of our neighbors who got a foreclosure notice in 2010,

or the 2.82 million 2009, or the 3.1 million 2008, every year more actually being removed from their homes than before. Depending on who you read there may be as few as 3 million to as many as 5 million or more to be filed over the next two years. Among that population will be higher suicide rates, perhaps as much as third suffering from major depression (a tremendously under diagnosed killer, and not only of that person), lives irreversibly damaged, higher hospitalization rates for serious illness (such as heart failure). Some just follow the Republican health plan and die.

This in a country where in 2007 they were writing things like "foreclosure rates soar (as in fly upward on wings) to over 400,000".

And I think it is important to remember that we are all "unfortunates" (or maybe better, victims) in the sense used above - there are very few people not affected negatively by this. (For example, a couple million more driven into poverty in the past year, the 50+ million need the $4.43 cents a day the government allots for food just to eat, cities and counties desperate for the revenue that used to come from now lower property values). If nothing else the opportunities and growth that might be available when most are thriving may be lost forever.

The majority of homeowners are not delinquent, (even if the lower rate of deliquencies is still 2 or 3 or 5 times what the historical rates were), but that vastly understates the pain and tragedy that exists. It is worth keeping in mind that banks and mortgage companies (supported by an FASB ruling that lets them value some assets at a mythical "market" value instead of what the homeowner can sell a house for) try to sell us on the idea that value exists, caring only slightly more now about whether the loan can even be paid back, as long as they can claim their fees. Many homeowners don't see it as so rosy, finding when they sell or think about selling their property that it is worth less than the bank says. Here's a survey says a full third of homeowners believe they are underwater - and they don't have an FASB ruling to prop up their values. (My neighbor bought their house, a rebuilt foreclosure at a far lower price than it once commanded. Two years later it is now worth almost $20,000 less by nearly any measure).

But yeah, the majority are doing more or less ok, though not nearly as well as the much smaller number of people who are collecting most of the wealth in the economy.

Today, anyway.

[SoCalMusicLover]

11. IF...IF...IF...IF...IF!!!!!

If the U.S. economy does not suffer more setbacks, the rate of mortgage holders behind on their payments should decline significantly by the end of next year, according to credit reporting agency TransUnion.

IF I win 100 Million in the lottery, I won't be to work tomorrow.

Chances of me winning are same as chances of NO MORE SETBACKS.

Oh, and always remember, the recovery is 6-9 Months away.....AT ALL TIMES!! Hope is just around the corner. Or better to say, Hope is ALWAYS just around the corner.

[coalition_unwilling]

13. Transunion's predictions are based on several highly shaky

premises, such as an improving economy in 2012 and stronger consumer confidence. Since I see at least a 50-50 chance that each of those could signifiantly worsen in 2012, I'd say there's a solid chance that deliniquencies will rise throughout 2012 and not start to fall after Q1.

[Fool Count]

14. Or, you know, it could increase. Or remain the same.

One of the three anyhow. That's, of course, assuming that no asteroid would strike the Earth in 2012. Then all bets are off.