The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 5.30% of all loans outstanding at the end of the second quarter - down 24 basis points from the first quarter and down 74 basis points from the second quarter of 2014, according to the Mortgage Bankers Association's (MBA) National Delinquency Survey.
It was the lowest delinquency rate since the second quarter of 2007.
Meanwhile, about 2.09% of all loans were in some stage of foreclosure as of the end of the second quarter. That's down 13 basis points compared to the first quarter and down 40 basis points compared to the second quarter of 2014, the MBA reports.
It was the lowest foreclosure inventory rate since the fourth quarter of 2007.
The percentage of loans on which foreclosure actions were started during the second quarter was 0.40%, a decrease of five basis points compared to the first quarter but basically unchanged relative to the second quarter of 2014.
The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 3.95%, a decrease of 29 basis points from the previous quarter, and a decrease of 85 basis points from the second quarter of 2014. This was the lowest level since the fourth quarter of 2007.
Marina Walsh, vice president of industry analysis for the MBA, says "nearly every state in the nation reported declining foreclosure inventory rates over the second quarter."
"The overall delinquency rate for Federal Housing Administration [FHA] loans dropped to 9.01 percent in the second quarter from 9.10 percent, as the 90 day or more delinquent category declined," Walsh says in a statement. "However, the 30-day and 60-day delinquency rate was up by a combined 10 basis points from the previous quarter. In addition, the FHA foreclosure inventory rate rose to 2.68 percent in the second quarter, four basis points higher than the previous quarter but still 13 basis points lower than a year ago. As more recent loan vintages begin to age and as older vintages enter the foreclosure process, we may see volatility in FHA delinquency and foreclosure rates."
Walsh points out that although only 40% of all mortgage loans serviced are in judicial states, "these states account for a growing majority of loans in foreclosure."
"For states where the judicial process is more frequently used, 3.41 percent of loans serviced were in the foreclosure process, compared to 1.15 percent in non-judicial states," she says. "States that utilize both judicial and non-judicial foreclosure processes had a foreclosure inventory rate closer that of the non-judicial states at 1.36 percent."
New Jersey, New York, and Florida had the highest percentage of loans in foreclosure in the second quarter.
"Despite a 36 basis point decline in foreclosure inventory over the first quarter, New Jersey's foreclosure inventory rate was still 7.31 percent, while New York, which had a 20 basis point decline over the first quarter had the second highest foreclosure inventory rate at 5.31 percent," Walsh says. "Both states primarily use a judicial foreclosure process."
Although it is still lingering, the foreclosure inventory is shrinking faster than it was in a majority of the judicial states.
see more: http://www.mortgageorb.com/e107_plugins/content/content.php?content.17101
Showing posts with label foreclosures. Show all posts
Showing posts with label foreclosures. Show all posts
Tuesday, August 18, 2015
Sunday, August 9, 2015
Ask an Attorney: Foreclosure of a second mortgage
Question: Back in 2009 when the economy tanked, I took a pay cut at my job and couldn’t afford to pay my mortgages. In 2013, I got a loan modification on my first mortgage and have been making payments on it for the past two years. Now, my second mortgage is threatening to foreclose. They tell me that unless I pay six years of past-due payments, they’re going to take my home. Can they do that? I thought second mortgages can’t foreclose. Please help!
Lenders that hold liens in second position, often referred to as second mortgages and/or HELOCs, typically have the right to foreclose on a home when the loan is in default. Collectively, all nonpriority liens placed after a first mortgage are called junior mortgages, and lien holders generally have the right to foreclose when the repayment terms are not met.
That said, it isn’t so much that junior lien holders can’t foreclose. A more accurate statement is that second lien holders typically don’t foreclose. The reasoning is simple.
NRS 40.462 explains how the proceeds of a foreclosure auction are distributed to various lien holders. Essentially, mortgage liens are paid in the order they were recorded on the property. The first mortgage is paid first, the second is paid second and so on. So, for example, if a first mortgage holder is owed $150,000 and the second mortgage holder is owed $50,000, there is no benefit for the second mortgage holder to foreclose unless the house will sell at auction for more than $150,000.
In other words, unless the sale price on the foreclosed property is higher than the first mortgage, the second mortgage holder won’t get any money, even if it were to foreclose.
Applying this to what happened recently in Nevada, lenders with second and third mortgages on properties that had values less than what was owed on the first mortgage wouldn’t foreclose. Instead, they waited until homeowners modified their first mortgages, often lowering the amounts owed on the homes, then waited until property values recovered enough that foreclosure would get them paid — at least in part. Now that home values have risen, junior mortgage foreclosure is becoming more common.
This isn’t the end of the world, though. Junior mortgages can be modified and/or reinstated. In some cases, it also is possible to settle the balance for pennies on the dollar or get them stripped entirely with zero cash out of pocket.
If you are going to pursue one of these alternatives, I’d urge you to act quickly before home values rise too far. The less your home is worth, the greater the chance to work something out with your junior lender.
read more: lasvegassun.com/native/panda/2015/aug/09/ask-an-attorney-foreclosure-second-mortgage/
Lenders that hold liens in second position, often referred to as second mortgages and/or HELOCs, typically have the right to foreclose on a home when the loan is in default. Collectively, all nonpriority liens placed after a first mortgage are called junior mortgages, and lien holders generally have the right to foreclose when the repayment terms are not met.
That said, it isn’t so much that junior lien holders can’t foreclose. A more accurate statement is that second lien holders typically don’t foreclose. The reasoning is simple.
NRS 40.462 explains how the proceeds of a foreclosure auction are distributed to various lien holders. Essentially, mortgage liens are paid in the order they were recorded on the property. The first mortgage is paid first, the second is paid second and so on. So, for example, if a first mortgage holder is owed $150,000 and the second mortgage holder is owed $50,000, there is no benefit for the second mortgage holder to foreclose unless the house will sell at auction for more than $150,000.
In other words, unless the sale price on the foreclosed property is higher than the first mortgage, the second mortgage holder won’t get any money, even if it were to foreclose.
Applying this to what happened recently in Nevada, lenders with second and third mortgages on properties that had values less than what was owed on the first mortgage wouldn’t foreclose. Instead, they waited until homeowners modified their first mortgages, often lowering the amounts owed on the homes, then waited until property values recovered enough that foreclosure would get them paid — at least in part. Now that home values have risen, junior mortgage foreclosure is becoming more common.
This isn’t the end of the world, though. Junior mortgages can be modified and/or reinstated. In some cases, it also is possible to settle the balance for pennies on the dollar or get them stripped entirely with zero cash out of pocket.
If you are going to pursue one of these alternatives, I’d urge you to act quickly before home values rise too far. The less your home is worth, the greater the chance to work something out with your junior lender.
read more: lasvegassun.com/native/panda/2015/aug/09/ask-an-attorney-foreclosure-second-mortgage/
Saturday, June 20, 2015
The foreclosure crisis would have happened even without risky mortgages
Finally, it seems, the mainstream press is beginning to get it right.
Too bad it only took the better part of a decade.
Fortune published this gem on recent research that suggests the foreclosure crisis would have happened even without risky mortgages.
Chris Matthews’ balanced look at a working paper by Wharton economists Fernando Ferreira and Joseph Gyourko, finds that prime mortgage foreclosed at a greater pace than subprime from 1997 to 2012.
The authors note: "The private label subprime mortgage-backed securities market did not really boom until late in the last housing cycle, so these data do not become nationally representative until the middle of the last decade."
However, by the time the bubble burst, the press found itself drawn, wrongly so, to the exciting, explosive "subprime" nomenclature.
In an interview with Matthews, Ferreira states that even putting 20% down for a mortgage won’t protect against widespread defaults when economic bubbles burst.
Here’s Matthews’ expert takeaway:
We can draw two conclusions from this data. One is that your chances of being foreclosed upon in the past decade was more a matter of timing than anything else. If you were a subprime borrower in, for instance 2002, who bought a bigger house than a more prudent and creditworthy borrower would have bought, chances are you would have been fine. But a prime borrower who did everything right—bought a house he could easily afford, with a large downpayment—but did so in 2006 would have had a higher chance of defaulting than the subprime borrower with better timing.
Too bad it only took the better part of a decade.
Fortune published this gem on recent research that suggests the foreclosure crisis would have happened even without risky mortgages.
Chris Matthews’ balanced look at a working paper by Wharton economists Fernando Ferreira and Joseph Gyourko, finds that prime mortgage foreclosed at a greater pace than subprime from 1997 to 2012.
The authors note: "The private label subprime mortgage-backed securities market did not really boom until late in the last housing cycle, so these data do not become nationally representative until the middle of the last decade."
However, by the time the bubble burst, the press found itself drawn, wrongly so, to the exciting, explosive "subprime" nomenclature.
In an interview with Matthews, Ferreira states that even putting 20% down for a mortgage won’t protect against widespread defaults when economic bubbles burst.
Here’s Matthews’ expert takeaway:
We can draw two conclusions from this data. One is that your chances of being foreclosed upon in the past decade was more a matter of timing than anything else. If you were a subprime borrower in, for instance 2002, who bought a bigger house than a more prudent and creditworthy borrower would have bought, chances are you would have been fine. But a prime borrower who did everything right—bought a house he could easily afford, with a large downpayment—but did so in 2006 would have had a higher chance of defaulting than the subprime borrower with better timing.
read more: http://www.housingwire.com/blogs/1-rewired/post/34244-the-foreclosure-crisis-would-have-happened-even-without-risky-mortgages
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