Deliquent Mortgages Jump Again: More Foreclosures Coming

Reuters reports today that the percentage of mortgages that are "current and performing" fell to 86.4% at the end of the Q4 2009. This is down 0.9% from the Q3 and marks a decline for an amazing seventh consecutive quarter. The report was by the Office of the Comptroller of the Currency and the Office of Thrift Supervision.

On a year over year basis, it was down 3.9% from a year earlier.

"The decline was attributable to a 21.1 percent jump in mortgages 90 or more days past due, to 4.7 percent of all mortgages in the portfolio at the end of 2009".

More foreclosures

The report adds that the jump in seriously delinquent mortgages is likely to lead to a rise in foreclosure actions.

The report defines "serious delinquencies" as those loans 60 days or more past due and loans delinquent to bankrupt borrowers.

"In this regard, servicers reported that they expect new foreclosure actions to increase in the upcoming quarters as many of the mortgages that are seriously delinquent may eventually result in foreclosure as alternatives that prevent foreclosure are exhausted," the report said.
Home forfeiture actions -- foreclosure sales, short sales, and deed-in-lieu-of-foreclosure actions -- increased by 8.6 percent from the previous quarter to 163,224. That is up 44.5 percent from a year earlier".

"The number of newly initiated foreclosures, however, dropped by 15.4 percent from the previous quarter to 312,529 after remaining steady the three prior quarters.
But that is up 19.0 percent from a year earlier. The number was curtailed as more loans are held in a delinquent status for an extended period as borrowers and servicers pursue alternate workout solutions, the report said"