Delinquencies on the rise
With the unemployment rate still above nine percent, it is no surprise that the U.S. Mortgage Bankers Association (MBA) is reporting that in the second quarter, the delinquency rate for American mortgage payments rose.
“Mortgage delinquencies are no longer improving and are now showing some signs of worsening,” Jay Brinkmann, Chief Economist of the MBA said. “While overall mortgage delinquencies increased only slightly between the first and second quarters of this year, it is clear that the downward trend we saw through most of 2010 has stopped.”
Brinkmann agrees that the delinquency rate is mostly impacted by the relentless unemployment rates and notes that the slight rise in borrowers who have missed at least one payment has reversed the trend of decreasing delinquencies in recent quarters.
Foreclosure volume drops (but it’s not good news)
As a continued sign of banks freezing foreclosures or hitting the pause button on processing as the robo-signing scandal remains unresolved has led to the number of new foreclosures filed hitting their lowest level since 2007. Some will likely use this statistic to paint a rosy picture of the housing sector, but it is less a sign of delinquencies and more a sign of frozen processing at the servicer level.
Foreclosures are also handled differently on a state level, impacting the overall numbers. “One of the reasons the percentage of loans in foreclosure in California (3.6 percent) is considerably lower than states like Florida (14.4 percent), New Jersey (8.0 percent), Illinois (7.0 percent) and New York (5.5 percent) is that California does not have a judicial foreclosure system. Therefore, as we work toward resolving the foreclosure overhang in the housing market, we should be careful to distinguish between the economic impediments to resolution and the legal impediments to resolution,” Brinkmann said.
The bottom line is that housing is still struggling and will continue to do so for some time. With uncertainty in the job market and with regulatory bodies, it is no wonder why no one is sure when housing might start seeing some overall improvement. For now, Realtors are surviving by working alternative niches they previously hadn’t, like apartment locating, short sale processing or broker price opinions. Agents are getting creative with marketing and utilizing technology to stay top of mind with consumers while banks and politicians steer the economy.