MBAA:Mortgage Delinquencies Continue to Rise

Today's dose of happy news comes (below) from the Mortgage Bankers Association . I have highlighted in bold  what I consider to be MBA's Chief Economist Jay Brinkmann most significant thoughts.  I don't know Mr. Brinkmann, but I admire his frank and incisive delivery of information. The hard reality of such deliberate and provocative press releases from an industry like the MBAA is that economic realities in this country are most probably at least as dark as Mr. Brinkmann portrays them. Mortgage Bankers do not benefit from lack of consumer confidence.  If they speak to the country in direct, measured terms, the reader should clearly take away from their rhetoric a cry for help, IMHO.  I encourage local or regional policy leaders who read this press release  to purchase MBAA data for all regions in the United States and carefully project, based on that data, outcomes for economic activity, homelessness, foreclosure, employment and poverty in their communities. -RMF

From http://www.mbaa.org/NewsandMedia/PressCenter/71112.htm :

Increases Driven by Prime and FHA Loans
“Despite the recession ending in mid-summer, the decline in mortgage performance continues. Job losses continue to increase and drive up delinquencies and foreclosures because mortgages are paid with paychecks, not percentage point increases in GDP. Over the last year, we have seen the ranks of the unemployed increase by about 5.5 million people, increasing the number of seriously delinquent loans by almost 2 million loans and increasing the rate of new foreclosures from 1.07 percent to 1.42 percent,” said Jay Brinkmann, MBA’s Chief Economist.
....

“The outlook is that delinquency rates and foreclosure rates will continue to worsen before they improve. First, it is unlikely the employment picture will get better until sometime next year and even then jobs will increase at a very slow pace.  Perhaps more importantly, there is no reason to expect that when the economy begins to add more jobs, those jobs will be in areas with the biggest excess housing inventory and the highest delinquency rates. Second, the number of loans 90 days or more past due or in foreclosure is now a little over 4 million as compared with 3.9 million new and previously occupied homes currently for sale, although there is likely some overlap between the two numbers. The ultimate resolution of these seriously delinquent loans will put added pressure on the hardest hit sections of the country.”