Mortgage Woes Continue

Two recent articles on the nation’s mortgage industry would appear to confirm that we haven’t quite hit bottom in this sector of the economy yet.

This one, from Reuters, reports that seven percent of homeowners with mortgages were at least 30 days late on their loans in February. While on its face this statistic may not appear all that concerning, it represents an increase of 50% from the same period a year earlier. What is perhaps more troubling is the fact that this delinquency rate represents “prime” loans, where the borrowers ostensibly are more “creditworthy”. Additionally, almost 40% of subprime borrowers were at least 30 days delinquent, up from 24% from the same period a year earlier.

But the $95 billion we’ve spent on loan modifications helped, right? Er, maybe. This second article notes that when loan contracts were actually modified under government-sponsored loan modification plans, just 37% of these loans reduced the monthly payment by more than 10%. And even when monthly payments were reduced by 10% or more, just under a quarter of these loans became seriously delinquent after six months.

I guess the "good" news in all of this is that at least there appears to be plenty of apartment space available...