From The Daily Capitalist
Three reports came out today regarding residential mortgage delinquencies, defaults, and negative equity.
CoreLogic (First American) reported:
The number of borrowers with negative equity declined slightly in Q110, but underwater mortgages and borrowers with less than 5% home equity accounted for 28% of all residential properties, according to the latest data from CoreLogic.
More than 11.2m, about 24% of all residential properties with mortgages were in negative equity at the end of Q110. That’s down slightly from 11.3m, or 24%, Q409. The state with the highest rate of negative equity mortgages continues to be Nevada, where 70% of all properties are underwater, followed by Arizona (51%), Florida (48%), Michigan (39%) and California (34%).
Las Vegas remains the core-based statistical area (CBSA) with the greatest rate of underwater mortgages. There, 75% of mortgaged properties are underwater. ...
Not only did the number of underwater borrowers decline, but the amount of negative equity also dropped for many. The number of borrowers with a mortgage loan-to-value (LTV) of 125% or more totaled 4.9m, or 10.4%, down from 5m, or 10.6%. The aggregate dollar value of negative equity for borrowers with 125% LTV was $656bn. Research has shown borrowers are more likely to strategic default once their LTV reaches 125%.
Zillow reported similar data:
More than a fifth of U.S. mortgage holders owed more than their homes were worth in the first quarter as repossessions climbed to a record, according to Zillow.com.
Twenty-three percent of owners of mortgaged homes were underwater during the period, up from 21 percent in the previous three months, the Seattle-based property data provider said today in a report. More than one in 1,000 homes were repossessed by lenders in March, the highest rate in Zillow data dating back to 2000. ...
Sales of foreclosed properties by banks accounted for more than a fifth of all U.S. home sales in March, Zillow said. They made up 66 percent and 62 percent of transactions, respectively, in the metropolitan areas of Merced and Modesto in California.
About 32 percent of homes sold in the U.S. in March went for less than their sellers paid for them, Zillow said.
Then TransUnion, a credit reporting agency reported similar news:
The rate of 60+ day delinquencies among US mortgages fell 12 basis points (bps) to 6.77% in Q110, from 6.89% in the previous quarter, according to market research by credit bureau TransUnion.
It marks the first quarterly decline since 2006, after 12 consecutive quarterly increases. On a yearly basis, however, the delinquency rate is up nearly 30% — or 155bps — from 5.22% in Q109.
Nevada (15.98%) and Florida (14.65%) continued to lead the states in terms of the highest delinquency rates in Q110. North Dakota (1.76%), South Dakota (2.44%) and Nebraska (2.68%) had the lowest mortgage delinquency rates.
Downward pressure on housing prices will continue on a national basis although some regions are improving.
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