Past Due Mortgages Become More Past Due

Two studies–one by Deutsche Bank and the other by TransUnion-show that mortgages with payments that are past due for 60 and 90 days have risen sharply.

The Deutsche Bank data shows that in some regions, most located in Florida, California, and Nevada, 20%, or more, of home loans are beyond the payment terms of the mortgages.  The bank uses 90 days as its measure.

TransUnion found that 6.67% of all mortgages nationwide were 60 days past due at the end of the second quarter. This compares to 5.81% in the same period a year ago.

The data is not surprising. As a matter of fact such statistics have become mundane and match other information from groups which include Zillow and RealtyTrac. Home owners are late on mortgages, homes are not being sold, home builders are in despair and unemployment in the construction industry is in the double digits.

There are few reasons to thinks the data will get better. Despite predictions to the contrary, housing is now in a flat spin. Buyers are  on strike despite low interest rates. Few of them want to try to catch the falling knife of plunging prices on the chance that they will catch prices at the bottom

Economists have finally come around to the realization that housing and unemployment are Siamese twins. People without work, especially for long time periods, lose their homes to foreclosure or walk away. Individuals without work are not potential buyers. If unemployment remains above 9% for another 18 months or two years, the housing market will remain in tatters.

Housing data will continue to get much worse, despite government intervention programs like HAMP. Nothing is a bargain, in the eyes of the public, when the moving in prices is relentlessly down.

Douglas A. McIntyre