Mortgage delinquencies jumped again in August, according to new data from Equifax and Moody's Economy.com. The new data provide the first big-picture look at how the credit crunch is hitting homeowners.
Nationwide, 3.56% of mortgages were at least 30 days past due last month, up 0.31 percentage points from July. The delinquency rate has increased about 1.5 points since bottoming out at the end of 2005, with fully half of that increase coming in the last three months.
Delinquencies have climbed since August 2006 in all 50 states, and 10 states have posted an increase of more than one percentage point. The rise in bad loans is "broad based," says Mark Zandi, chief economist at Moody's Economy.com. "That signals that foreclosure problems are going to be widespread."
Notice that late payments are accelerating.
Take a look at this graph that shows when mortgage resets will occur and by how much.
Not a pretty picture, is it?
4 comments:
So what do naive, average joes like me invest in?
It's funny, I've seen this graph several times lately, and I still get a sense that the MSM is unaware of what's coming down the pike. In fact, their response to the mortgage situation seems to track with the chart -- the higher numbers came out for August and there was a flurry of stories about it, yet no acknowledgement that it will get much worse -- the consensus seems to be that the Fed has saved us and/or it's peaking out right now.
I predict that the slight decline in October-November will elicit a media response of 'the crisis has passed!', like the tide going out before the tsunami. And then, of course, Q1 2008 will arrive...
Can you identify the source of the data in this chart for me. I have used this at work and need to be able to source the data. I have sourced you for the chart.
I've seen this particular chart from FTN Financial, but Credit Suisse has essentially the same thing here:
http://www.billcara.com/CS%20Mar%2012%202007%20Mortgage%20and%20Housing.pdf
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