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New Loan Delinquencies on the Rise Again

July 16, 2010 at 6:45 PM Leave a comment

By: Diana OlickMore Share 

Just when you thought things might be turning around, the mortgage crisis takes yet another little dip to the downside.

Lender Processing Services just put out its May “Mortgage Monitor,” and some promising trends aren’t so promising anymore, specifically new delinquencies and cure rates.

While the total delinquency rate rose 2.3 percent, which is not surprising given how much is in the pipeline, the 30-day delinquent bucket jumped 10 percent. That is surprising because the that number had been coming down of late. The LPS data report says that’s because the “seasonal improvement period has expired,” but I’m not sure normal seasonal patterns really apply to this market anymore.

More likely is that home prices are not rebounding at the expected/hoped for pace, prompting more borrowers who are underwater on their loans to choose not to pay. And while the job market isn’t bleeding so much anymore, it’s not adding jobs back at the rate we need, nor is it re-instituting those full time jobs that were slashed to part-time, leaving many borrowers still “underemployed.” So the delinquency rate nationwide now stands at 9.2 percent from this particular data set, and with the rise in new delinquencies, it won’t be coming down any time soon.  Read More:  http://www.cnbc.com/id/15837671

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