Magazine article American Banker

Housing Market Still Struggling

Magazine article American Banker

Housing Market Still Struggling

Article excerpt

Byline: Cheyenne Hopkins

WASHINGTON - The number of current and performing mortgages dropped 1.5% to 87% in the third quarter - the sixth consecutive quarterly drop, regulators said Monday.

The report from the Office of the Comptroller of the Currency and the Office of Thrift Supervision also showed an increase in foreclosures, which rose to 3.2% and have now surpassed the 1 million mark.

Delinquencies increased among all different loan categories, with serious delinquencies rising to 6.2% of national banks and thrifts' servicing portfolios. Payment option adjustable-rate mortgages performed the worst, making up 16% of seriously delinquent loans and 11.9% of foreclosures in process. Serious delinquencies from mortgages guaranteed by government entities increased 7.5% from the previous quarter, while those in the foreclosure process jumped 2.5%.

Prime loans also had a deterioration. Seriously delinquent prime loans increased to 3.6%, more than double their level a year earlier.

Home-retention efforts increased but servicers still faced an uphill challenge making trial workouts permanent and preventing re-default rates, regulators said. Banks and thrifts implemented more than 2.4 million loan modifications, trial period plans or payment plans between Jan. 1, 2008, and Sept. 30, 2009.

Servicers began 273,913 trial modifications under the administration's Home Affordable Modification Program during the third quarter, bringing the total number of trial modifications to 354,324 since the program started in March. …

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