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Thanks for stopping by my Mortgage Statistics Blog...

If you're wondering what my top blog posts have been, here they are:

1. 19 Years of Mortgage Origination Data
2. A Century of Home Ownership Rates
3. Option Arm Resets 2009, 2010, 2011 and 2012
4. Wells Fargo Mortgage Delinquency Rates
5. Will the Mortgage Interest Deduction go away?
6. and Fannie Mae Delinquency Data

What else would you like to see?

Mortgage Charge Off-Rates Have Declined Significantly

The Federal Reserve puts out data concerning charge off rates for all commercial banks in the United States. During 2010, the charge-off rates have been declining. You can expand the chart above by clicking on it, but you can see that the charge-off rate for commercial real estate (excluding farmland) has fallen to around 2%, as has that for residential mortgages---The drop off in credit card charge offs has been even steeper dropping from a peak of nearly 11% in Q2-2010 to 7.7% in Q4-2010.

Banks first must place non-performing mortgages in the delinquent portion of their books for several months before fully charging them off.

Jobless Rate Doubles; Fannie & Freddie Delinquencies Septuple

Click on Chart for a Bigger Image

Here is an update of a set of data that I've been paying attention to for the last year. It compares the unemployment rate (Blue Line), the U6 Broader Unemployment Rate (Purple Line, which includes the jobless, and the people working part-time for economic reasons) with the delinquency rate on Fannie Mae (Red Bar) and Freddie Mac (Green Bar) mortgage loans on single family homes.

The picture isn't pleasing---You can see that as broad unemployment rate increased from less than 10% to 17.5% (in October, 2009)---The delinquency rate on home loans for Fannie & Freddie (which are typically Prime Loans) have increased by almost 6 - 8 Fold!

Let me repeat that---In Late 2006 and Early 2007, the prime mortgages were delinquent at merely ~0.5%. Now Freddie Mac has a 3.33% Delinquency Rate (September, 2009) and Fannie has a Delinquency Rate of 4.45%.

People should remember that in 2007, the economy & markets started tanking because sub-prime mortgages started going delinquent... Granted, those loans were going bust a significantly higher rate than the Freddie & Fannie notes---but also remember that Freddie & Fannie loan out significantly more money than what was ever given out to sub-prime borrowers... I don't have the data, but I'd venture to say that in order-of-magnitude--these loan delinquencies could be as bad or worse than the sub-prime crises.

Foreclosures to set a Record in 2009

According to a story on the Washington Post, the rate of home foreclosures in 2009 is expected to crest over 1.8 million (vs. 1.4 million in 2008). The main cause for the sharp uptick in foreclosure filings is not the continuation of the sub-prime crisis---but actually the sharp increase in unemployment rates.

As more and more borrowers are significantly underwater on their homes and have living pay-check to paycheck a prolonged bout of unemployment can really drive them to stop paying the bank and walk away from their home.

1H-2009 saw 1.5 million homes start the foreclosure process

According to CNN, during the first half of 2009 1.5 million homes began the trek down the foreclosure process---representing 1 in every 89 households.

CNN which used data provided by realtyTrac broke down the data to show the 10 states where the most mortgage foreclosure activity is taking place. Here's the data:

1. Nevada 1 in every 16 houses in foreclosure
2. Arizona 1 in every 30
3. Florida 1 in every 33
4. California 1 in 34 houses
5. Utah 1 in 69
6. Georgia 1 in 70
7. Michigan 1 in 74
8. Illinois 1 in 76
9. Idaho 1 in 79
10. Colorado 1 in 80
11. Ohio 1 in every 86

Commercial Mortgage Delinquencies Quickly Climbing

Click on Image for a Larger View.

Crains Chicago today showed a chart that shows just how bad the Great Recession is impacting the rate of commercial mortgage delinquencies. At the end of Q1-2009, 3.6% of American Commercial mortgages were delinquent and 5.6% of Chicago area loans were behind in their payments---Both are almost 4 times worse than what was typical during 2006.

Of the Top-100 US Metro Areas, Foresight Analytics says that these 10 areas have the worst delinquency rates for the commercial mortgage market:

1. Warren-Farmington Hills-Troy, Michigan 6.3%
2. Miami, Florida -- 5.7%
3. Chicago -- 5.6%
4. Grand Rapids, Michigan 5.4%
5. Milwaukee, Wisconsin 5.2%
6. Indianopolis, IN -- 5.1%
7. Jacksonville, FL 5.0%
8. Sarasota, FL--4.9%
9. Dayton, Ohio -- 4.5%
10. Lake County, IL / Kenosha County, WI 4.4%

In the 1990's commercial mortgage delinquencies peaked around 9% and it's likely that as this recession lingers, unemployment climbs and vacancies rise--the rate of delinquencies will continue to escalate.

What I found quite interesting is that most of the "top-10" come from the Midwest and Florida---but as we all know the credit crunch has hurt consumers in California, Nevada, Arizona and Oregon as hard as the midwest---so I'm guessing in a few more quarters time you'll be seeing communities like Phoenix, LA, Las Vegas, and Portland creeping to the top of the list as well.

Fannie & Freddie's Serious Delinquencies Continue to Worsen

Click on Image for a bigger chart

Data released from Freddie and Fannie show that the rate of serious delinquencies continue to worsen in March (Freddie) and February (Fannie).

Freddie saw a 2.29% serious delinquency rate in its single family home mortgage portfolio, while Fannie Mae saw almost 3% of it's single family home loan portfolio in the seriously delinquent category. [both of these data points are shown as bars & use the left hand scale on the chart].

Fannie and Freddie have large amounts of prime mortgages on their books and as you can see, as the unemployment rate and underemployment rate in the US continue to increase (Lines on the chart using the right hand scale), the numbers of people with prime mortgages who fall behind and run into payment problems continue to increase.

Since we can see that the unemployment continued to rise in April, 2009 I think we can safely forecast that the GSE's delinquency rate will continue to climb upwards.

Two Thirds of Las Vegas Home Mortgages are Underwater

According to zillow some metropolitan areas of the country have just HUGE amounts of homes with mortgages in a negative equity situation.

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The hardest hit locations include Las Vegas, NV (~2/3rds of home owners are underwater), many parts of California (Stockton, Modesto, Merced, Riverside) and Phoenix and Florida.

According to zillow, around 22% of homeowners with a mortgage in the US have negative equity. This makes it much less likely that these home-owners would be able to refinance---and should a negative life event (health issue, divorce, loss of job) occur you count on increased mortgage delinquencies, defaults and foreclosures.

Zillow says that 22% of Mortgages are Underwater

According to zillow, at the end of Q1-2009 22% of homes with mortgages on them were underwater--i.e. the debt outstanding on the home was greater than the value of the home.

This is up from 17.6% of motgages being underwater in Q4-2008 and 14.3% in Q3-2008.

Fannie & Freddie Delinquency Rates vs Unemployment Rate

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It has been a couple of months since I've compared the serious delinquency rates at Fannie Mae and Freddy Mac with the unemployment rate and (U6) underemployment rate provided from the Bureau of Labor Statistics.

The news doesn't appear to be getting any better---The Fannie Mae delinquency rates on single family homes have incrased from 2.13% in November, 2008 to 2.77% in January, 2009 (The latest data-point available)---The delinquency rate at Freddie Mac has increased from 1.72% in December, 2008 to 2.13% in February 2009.

Given that the March Unemployment Rate is 8.5% and the U6 unemployment rate (which includes underemployed workers is 15.6%)---I estimate that you'll see Freddie's delinquency rates for March 2009 come in over 2.5% and Fannie's to be north of 3%... Keep in mind most of these mortgages were of significantly higher quality than your run of the mill sub-prime loan, Alt-A loan or Option Arm Loan---Those delinquency rates are significantly higher.

Almost 1 in 9 Michigan Mortgages are Delinquent

According to the Detroit Free Press more than 1 in 10 Michigan home owners are 30 days (or more) delinquent on their mortgages and almost 1 in 25 Michigan mortgages are in foreclosure as of Q4-2008.

The story references a recent Mortgage Bankers Association report that cites 8.6% of all U.S. mortgages are delinquent in the U.S. (compared to 11.1% in Michigan) and 3.7% of Michigan's mortgages are in foreclosure.

The report also stated:

... five states – California, Florida, Nevada, Arizona and Michigan – continue to dominate the delinquency numbers. Yet five other states – Louisiana, New York, Georgia, Texas and Mississippi – had the sharpest increases last quarter in loans 90 days or more late, which are signs that the recession’s impact is spreading, he said.

Times are tough in Michigan as demand for durable goods continues to decline and the state saw 11.6% unemployment in January, 2009.

20% of homes with a mortgage are under-water

Data released today shows that 20% of home owners with a mortgage owe more than what their homes are currently worth.

This amounts to over 8 million residential properties that have negative equity.

The article goes on to state:

Arizona, California, Florida, Georgia, Michigan, Nevada and Ohio remained the most stressed states, with 62 percent of underwater borrowers and just 41 percent of mortgages.

You can read the rest of the article here

You can be sure that as long as states like California, Florida, Georgia, Michigan and Ohio continue to see unemployment rates rise, delinquency rates on mortgages will go up and with many of those home-owners in a negative equity situation on their loans, and significant amounts of resets yet to come---the collapse in housing prices will continue for a couple of more years.

Wave of Mortgage Resets to hit 2009 - 2012

One of the best blogs out there covering the current mortgage market is Dr. Housing Bubble and today they issued a post that included the chart below:

Click for a larger image

This is a Credit Suisse chart that shows the the oncoming mortgage resets for ARMs, Option ARMs, Subprime Loans, Alt-A Loans, Prime Mortgages and Agency Mortgages. And the outlook is grim---There is a significant amount of mortgage resets that are scheduled to occur in 2009, 2010, 2011 and 2012.

Currently in 2009 Mortgage rates are at all-time lows---but if your house is underwater, you can't refinance and will face a mortgage reset. Looking into the future, many people are seeing much higher rates in the outer years---So when the 2010 - 2012 resets occur, home-owners' monthly mortgage payments could take a quantum leap up.

As I've blogged about before, this housing bubble took years to climb in value---and it will likely take years to come to a bottom.

Jumbo Mortgage Defaults on the Rise

According to bloomberg Jumbo Mortgage Defaults are rising at their fastest pace in over 17 years.

Jumbo-loan defaults rise at fastest pace in 17 years
BLOOMBERG

NEW YORK — Owners of luxury houses are falling behind on mortgage payments at the fastest pace in 17 years.

About 2.57 percent of prime borrowers who took out jumbo loans last year were at least 60 days delinquent within 10 months, according to LPS Applied Analytics, a mortgage data service in Jacksonville, Fla.

That big a proportion at that speed hasn’t been recorded since at least 1992, when LPS began tracking the market. It took 19 months for as large a proportion of borrowers from 2007 to be so overdue.

The jump in late payments on jumbo loans, although still lower than the 20 percent delinquency rate in subprime mortgages, signals that the borrowers with the most money and the best credit are hurting as the U.S. recession deepens in its second year. It also means these loans will be even more difficult to obtain and more expensive to pay off.

President Obama’s homeowner aid proposal has no provision to help jumbo-mortgage borrowers.

About 1.92 percent of home­owners with 2008 mortgages backed by Fannie Mae and Freddie Mac fell at least 60 days behind, LPS Applied Analytics said. Jumbo loans are bigger than what the two government-controlled agencies buy or guarantee.

Currently the Fannie-Freddie cap is $417,000 in most places and up to $729,750 in areas with higher home prices.

A Decade of Delinquency and Charge-offs

According to data from the Federal Reserve the Delinquency Rates seen by US Banks in Q4-2008 reached 10-year highs in Q4-2008.

The Delinquency Rate on Single Family homes in Q4-2008 was 6.29%---Up 107 basis points from Q3-2008's 5.22%. Clearly as unemployment continues to rise, delinquencies will continue to rise.

The Delinquency Rate on Commercial Mortgages rose from 4.74% in Q3-2008 to 5.36% in Q4-2008---Also a rate much higher than anything we have seen in the past decade.


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What is interesting is when you look at the Charge-Off Rate for Single-family homes. Q4-2008 mortgage charge-off rate was only at 1.58%--compared to 1.46% in Q3-2008. I believe this is because many more banks started to try "work-outs" with the delinquent consumers and also wanted to "wait and see" what Obama's plan would be help out homeowners behind in their payments. I predict that Q1-2009 (Data to be released ~May 2009) will show continued slow growth in charge-offs, but sooner or later the banks will have to pay the piper and charge-off rates on single family home mortgages will spike up (Likely Q2 & Q3-2009).

The Charge-off Rate for commercial real estate was up from the 1.16% in Q3-2008 to 2.04% in Q4-2008. This is the highest rate since 1992, and could continue to climb as businesses fall on hard time and demand for office and retail space dwindles making the leverage taken out on such properties much more difficult to service, and much more likely to be charged-off.

Freddie Mac vs Fannie Mae Mortgage Delinquency Rate 2005 - 2008

In a couple of recent posts I showed how from 2005 to 2008 Fannie Mae's Delinquency rate on single family mortgages has more than tripled and during the same time Freddie Mac's delinquency rates on single family mortgages have more than doubled---so I thought it would be useful to put all that data on a single chart.

Below you will see delinquency statistics for Freddie Mac (Green Lines) and Fannie Mae (Red Lines) from 2005 to 2008. Throughout 2005 and much of 2006, the difference in delinquency rates between the two firms was ~10 basis points. However, by the end of 2008 Fannie Mae was seeing significantly higher delinquency rates than Freddie Mac.

In November 2008, Fannie had delinquency rate that was 61 bps higher than Freddie for "Total Single Family" mortgages---And 228 bps worse for Fannie when you are only looking at single family mortgages with credit enhancements (i.e. Private Mortgage Insurance)


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Freddie Mac Mortgage Delinquency Rate More than Doubles from 2005 to 2008

According to data from Freddie Mac it saw delinquency rates on single family more than double from 2005 to 2008. Total Single-Family home mortgage delinquency rate (3+ months behind or in foreclosure) for Freddie Mac mortgages was 1.72% in December 2008, and rose more than 100 basis points in 2008.


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The delinquency rates for Freddie Mac mortgages with Private Mortgage Insurance (PMI) or other credit enhancements was 3.79% in December 2008---Up over 200 basis points in 2008.

Fannie Mae's Mortgage Delinquency Rate more than triples from 2005 to 2008

According to data & statistics from Fannie Mae the amount of mortgage delinquencies on single family home mortgages have more than tripled from early 2005 (0.64% in 2/2005) to the end of 2008 (2.13% seriously delinquent in 11/2008).

The chart below looks at conventional single-family mortgages that are three months ore more past-due or in foreclosure as a percent of the total number of conventional single family mortgages.


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The figures for Credit Enhanced Fannie Mae mortgages is worse than average with a serious delinquency rate of 5.69% in November 2008 (and rising). (These are loans with Private Mortgage Insurance (PMI) or some other type of credit enhancement).

25% of Mortgages are Underwater in Southern California's San Diego County

As this graphic shows many of the area codes in San Diego County California are underwater (More is owed on the mortgage than what the property is worth). In many zip-codes between 20% to 50%+ of the homes are underwater.

This makes it very difficult to sell your house, and consequently you can expect further increases in short-sales, foreclosures and property price declines in San Diego County.

Sub-prime loans made in CA, NY, FL, NV, AZ and TX

The Wall Street Journal online has published an interesting interactive map that shows the percentage of mortgages that went to sub-prime borrowers between 2004 & 2007.

Specifically you can view what the market looked like for California, Florida, New York, Arizona, Nevada and Texas.

http://online.wsj.com/public/resources/documents/hispanics08_map.html