Delinquency rates are up
Lender Processing Services is reporting the total American loan delinquency rate of mortgage borrowers whose loans are 30 days or more past due but not yet in foreclosure, is now at 8.15%, thus, the total number of homes in delinquency is 4,285,000 and with foreclosures, the number is an astonishing 6,452,000.
The home loan delinquency rate is up 2.4% from May but down 14.7% from June 2011.
Florida, Nevada, Mississippi, New Jersey and Illinois currently have the highest rates of delinquencies while the lowest rates of delinquencies are in Montana, Wyoming, Alaska, South Dakota and North Dakota.
Courts not upholding foreclosures is problematic
Currently, the lending industry is in a very tight spot as recent reports reveal that not only is robo-signing still going on despite bank denial, thousands of loans that were packaged and sold to investors don’t even have promissory notes, and add to all that mess, courts across the nation are saying MERS doesn’t have the authority to issue foreclosure rights to a bank. (Read more on these topics here.)
All of these issues are potentially destructive to the foreclosure process and given that over six million homeowners are in danger of foreclosure are potentially looking at a different process altogether. Banks are questioning who has the authority to do what and homeowners are suing on technicalities and with no promissory note or proof that a bank even owns a loan, banks are losing foreclosure suits in rising numbers.
Although delinquencies are up a bit this month, they are down over the past year by a healthy margin, but will it matter if courts are not upholding foreclosures? How will banks respond? So far, the same problems plaguing the banks and have led to endless probes and even criminal charges and no changes have been made, so will courts denying foreclosures implement change? Time will tell.