Why the Rise in Past-Due Mortgages?
Both Equifax Inc. and Moddy’s Economy.com have reported that the number of past-due mortgages continued to rise in the three months ended Sept. 30. Approximately 2.33% of mortgages were delinquent at the end of the third quarter. This is the highest level since 2003.
Historically, bad loans have climbed when the economy has weakened and unemployment begins to rise. However, the current upward trend in bad loans doesn’t seem to be a result of those factors. In fact, experts are speculating that it appears to be more closely tied to looser lending standards, borrowers tapping their equity and slowing home-price growth.
The biggest jump in the delinquency rate since the end of last year were seen in Stockton and Merced, Calif., and Las Vegas-Paradise, Nev. Delinquency rates were also at their highest in McAllen-Edinburg-Mission, Texas; Brownsville-Harlingen, Texas; and Detroit-Livonia-Dearborn, Mich.
To read the full story, check out the article in the RealEstateJournal.com.