State tops U.S. in mortgage payments late by 30 days in 4Q

February 17, 2011

Banking & Finance, Energy, Real Estate

By Ted Carter
Mississippi led the nation in mortgage payments overdue by 30 days in the fourth quarter and its 90-day delinquent rate began to resume a previous rise, the Mortgage Bankers Association said in a press conference Thursday morning.
The state’s overall rate of 13.30 percent was among the nation’s highest, while the 5.93 percent 30-day tardy rate led even state’s such as Florida, Nevada and California, among the nation’s most problem-plagued for residential real estate loans.
On the plus side, Mississippi’s 60-day tardy rate of 2.43 percent and late rate of more than 90 days, 8.35 percent, were well off the national leader board.
The MBA says it is not entirely sure why Mississippi’s 30-day delinquent rate topped the nation. “We don’t have any clear explanation for what is going on,” said Mike Fratantoni, the MBA’s VP for single-family research.
“The typical drivers are the unemployment rate and mix of loans,” he said.
A mix that includes more traditional loans with adjustable rates can push the delinquent rate upward as well. Also this quarter, an increase occurred in tardy Federal Housing Administration loans. If the mix included a large number of FHA loans, that could have helped to drive the tardy rate up, Fratantoni said.
A colder than normal winter could be contributing as well, according to MBA researchers, who said that it is not unusual to see a rise in 30-day delinquencies as the first winter heating bills come due in December. “Keeping the house heated tends to take precedent,” said Jay Brinkman, MBA chief economist.
Home owners tend to catch up on the payments in January, he said.
Mississippi’s delinquent mortgage rate has been among the highest in the nation for nearly a decade, according to the MBA. “If you go back to 2005, the pre-Katrina period, Mississippi ranked among the highest delinquency rate,” Brinkman said “So it’s traditionally high.”
Nationwide, these latest delinquency numbers represent significant across-the-board decreases in mortgage delinquency rates, Brinkman said. “Total delinquencies, which exclude loans in the process of foreclosure, are now at their lowest level since the end of 2008. Mortgages only
one payment past due are now at the lowest level since the end of 2007, the very beginning of the recession.
Perhaps most importantly, loans three payments (90 days) or more past due have fallen from an all-time high delinquency rate of 5.02 percent at the end of the first quarter of 2010 to 3.63 percent at the end of the fourth quarter of 2010, a drop of 139 basis points or almost 28% over the course of the year. Every state but two [Mississippi being one] saw a drop in the 90-plus day delinquency rate and the two increases were negligible.”

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