A report by Black Knight show mortgage delinquencies in January rose sharply. Delinquencies are up 167,000, up 6.6%. This is the first time in nearly a year that the delinquency rate rose above 5%.
Please consider the Black Knight report Delinquencies Up Sharply; Prepayment Rate Drops.
Highlights
- Delinquency rate up 6.6 percent in January; back above 5 percent nationally for the first time in 11 months
- Prepayment rate ( historically a good indicator of refinance activity ) dropped 29 percent to its lowest level since February 2014
- Foreclosure sales (completions) up nearly 16 percent following holiday moratoriums
- Active foreclosure inventory continues to decline; down 26 percent from last year
Start of New Trend?
Is this the start of a new trend?
I think so, but one month does not a trend make. There is one noticeable caveat to the report.
I talked with Black Knight regarding the significance of the huge jump and they replied “January ended on a Sunday, and historically, months that do tend to see elevated levels of delinquencies because payments can’t be processed on the last two days of the month.”
To be safe we need to watch the next few month’s of data.
Mike “Mish” Shedlock
My favorite number in the BK monthly mortgage monitor is number of days delinquent till foreclosure. The latest monitor is December. Check the appendix.
On January 31, 2008 that number was 256 days
On December 31, 2015 that number was 1060 days.
3 YEARS!
Why I’ve always advocated there was/is a large squatter stimulus that main stream economists refuse to recognize that helped the “recovery”. Another example of the irresponsible getting bailed while the responsible (savers) got the shaft.
http://www.bkfs.com/CorporateInformation/NewsRoom/Pages/Mortgage-Monitor.aspx
Luca says: what irresponsible are you talking about? The Working class dope who borrowed money so he could own a home or the Finance, Insurance and Auto Billionairs who leveraged up to to make more billions? Oh, I forgot, only the working slob is irresponsible, the Wall Street group are shrewed. They know the treasury vault is always open to them. Luca says: If you can give AIG billions you can give a working slob a house.
The guilty are everywhere from Wall Street to “home” buyer.
You are fantasizing if think all “working class dope” bought a home as shelter … and should be let off the hook (apologies to those who tried to do the right thing). In the heyday (circa 2005) Home Equity Withdrawl (refinancing with cash out) reached $500 billion / year. The “working class dope” was buying new vehicles / vacation / concert tickets / etc with proceeds that he had no chance of paying back unless housing continued to appreciate to the moon. The reason they got foreclosed is that they either bought a house they had no prayer of making payment when mortgage reset (if they could not understand the mortgage documents … no business buying) … or they HEWed out so much to make future payments unrealistic. Icing on the cake was being allowed to stay in their homes months / years after making last payment.
Circular firing squad.
The operative word in your post is “give” as in Gift, and as we are in a monetary economy not a barter one that means Gifting money to those who were beguiled by the banking/financial system to borrow. If we integrated monetary gifting into our economy and money systems those systems would actually be functional. Monetary grace as in the free gift….the new monetary and economic paradigm.
wisdomicsblog.com
mortgage reset
Should have added clarity here. Back then a slew of “affordability” mortgage products. Teaser rates / interest only / negative amortization / Adjustable Rate Mortgages made the payments “affordable” for a short time. Then Bam! Reset to much higher payment.
Luca is a politically-correct Marxist who sees virtue in the poor and vice in the rich. Luca’s solution = Marxist STATISM.
The greatest MASS MURDERERS of innocent civilians in human history have all been STATIST (fascist, communists, socialists, etc):
Mao murdered about 100-million innocent civilians
Stalin murdered about 60-million innocent civilians
Hitler murdered about 30-million innocent civilians.
STATISM = a highly centralized, dictatorial form of GOVERNMENT that seeks to exercise control over every aspect of the private sector (commerce, religion, marriage, politics, sex, entertainment, sports, etc). SOCIALISM and FASCISM and COMMUNISM are examples of STATISM.
1,000 days delinquent. How is that even possible? People get married, make children & get divorced in that amount of time.
If they’d stretch that out by a factor of 10, I could reasonably die of old age before they foreclose on me…
Very interesting… I wonder what the trend for days of delinquency have been? Have they been going down since 2012?
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Something tells me the Fed just ain’t gonna let another subprime implosion happen again. It would be too damaging to the Brave New World of Fantasy Finance they have so meticulously engineered here.
And it is an election year, you know.
More likely, .gov will end up nationalizing pretty much all of the mortgage industry, ending up being the monopoly provider of all real estate lending.
That said, what could make homes more “affordable” in the minds of Keynesian fools, than paying folks to take out a mortgage? Hell with the poor schmuck holding Money Market instruments when the buck is broken by NIRP.
duh! congress did nationalize the mortgage industry when they seized control of fannie and freddie!
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People have simply taken on to much debt. Becoming unhinged and falling off the economic wagon is easier than most people think. Those who have experienced the slip into an economic quagmire often will tell you, “I never thought it would happen to me.” The fact is it does happen and when it does life tends to show little mercy. Last year it was reported that approximately 62% of Americans have no emergency savings for things such as surprise expenses or a car repair.
Exacerbating this situation is that so many people receive their so called paycheck from the government. The number of people living on government transfers of wealth has grown, as of today the National Debt Clock shows that over 161 million people are currently “receiving benefits” and 45 million Americans get food stamps.
http://brucewilds.blogspot.com/2016/02/falling-off-economic-wagon-easier-than.html
Hey Mish: Since you switched platforms, I had not received any of your emails. I had to re-find you and subscribe to your new site to receive your emails. I am receiving the Mish Talk emails. I hope I am not missing something.
John Hanson