Doom it's not just a video game

Lots of doom and gloom in the news this week. With the unwinding of the government support lots of stories are popping up with all kinds of predictions. In addition there is the normal crop of terrible numbers reported regarding defaults and mod rates. Here's a few gems.

Mortgage delinquencies hit another all time high. (they hit a new high each month).

TransUnion's quarterly analysis of trends in the mortgage industry found that mortgage loan delinquency (the ratio of borrowers 60 or more days past due) increased for the 12th straight quarter, hitting an all-time national average high of 6.89 percent for the fourth quarter of 2009. This quarter marks the first time the mortgage delinquency rate increase did not decelerate after doing so for three consecutive periods.

This statistic, which is traditionally seen as a precursor to foreclosure, increased 10.24 (to 6.9% percent from the previous quarter's 6.25 percent average. Year-over-year, mortgage borrower delinquency is up approximately 50 percent (from 4.58 percent).

The area with the highest average mortgage debt per borrower was the District of Columbia at $372,869, followed by California at $352,688 and Hawaii at $317,599.

"We believe that the 60-day mortgage delinquency rate will peak between 7.5 and 8 percent over the course of 2010, depending on the prevailing economic conditions associated with the housing market," said Guarrera. (so it has more to go, currently at 6.9%)......

Treasury officials today said they are still concerned about a coming wave of foreclosures, many from pay option ARMs and many from the prime jumbo basket, particularly hard hit by unemployment. Only 2/3 of borrowers in the HAMP program are current on their payments. That's why officials now say they are looking at unemployment options and more incentives to borrowers to keep paying on trial modifications and on loans that are significantly "underwater" with respect to the property value........

More waves of foreclosures will keep downward pressure on home prices in parts of the U.S. over the next several years, two new studies project. The studies—by John Burns Real Estate Consulting Inc. and Standard & Poor's Financial Services LLC—both conclude that most efforts to modify loans with easier terms will delay, not prevent, the loss of homes to foreclosure.

Loan modifications "may be helping marginally, but they are not going to solve the whole problem," said Diane Westerback, a managing director at S&P. Loan servicers, firms that collect payments and handle foreclosures, seem to have "nearly exhausted the supply of plausible candidates for loan modifications" and will find that many loans are "unredeemable," the S&P study says........ (duh!)

Regarding the upcoming end of the tax credit and the MBS program you would think that both the banks and the short sellers would be scrambling to get thier homes on the market. There's sure to be another rush of buyers as the tax credit ends and there's only another month before the MBS program ends and the rates go up (anywhere from 1/3% to 1% rise is expected). If I had to sell I would want to do it now. Lot's of buyers, little inventory and incentives to buy. By the end of April that all goes away.