I recently read a report by the Mortgage Bankers Association.  To say the least, it had a couple  of interesting things.  Mortgage Applications are way up (nearly 12.8%) See: http://online.wsj.com/article/BT-CO-20090923-704841.html .  Interestingly so are delinquencies.  According to Equifax, a national Credit Monitoring Company, Mortgage delinquencies set a record this month with 7.58% of all US Mortgages at least 30 days late (http://www.reuters.com/article/GCA-Housing/idUSTRE58K29E20090921 ).  You might be wondering exactly what this means.  Well here are a couple of my thoughts.

 

First, it is very clear that the credit crunch is still with us.  Every day I hear stories of how WELL QUALIFIED buyers are having a tough time getting conventional (regular bank or credit union financing).  They need great credit scores and large down payments.  But FHA loans are plentiful and still do not require stratospheric credit scores and yes, the day of zero down is still with us, but only if you don’t have any money to put down!!  That’s right, those with low credit scores and little cash to put down are still getting ‘easy mortgage money’ through FHA.  In large part that is accounting for the surge in Mortgage applications.  And we are seeing significant increases in sales in the traditional FHA price ranges (in Tampa – the market is quite active in the $100,000-200,000 range).  So yes, Mortgage activity is up and it is easy to understand why.

 

Delinquencies are up – no wonder.  The economy is still struggling to get its feet back under it.  Unemployment remains at generational high levels.  While it has stabilized some in the last few weeks, it is not clear if we have seen the worst.  And we all know that improvement in the employment rates lag economic recovery in general.  Add to this many homeowners who are still ‘underwater’ it is no wonder that many people either have no choice to miss mortgage payments to survive or have no choice but to walk away from their homes.

 

Times are tough.  In my mind, there is no question that the housing challenges that we face will be with us for several years to come.  Delinquency, pre-foreclosure and foreclosure cases will continue to be a major national issue. 

 

Dr John

 

Dr John, Karen and Susan are experts in Florida Real Estate.  They have been actively managing Real Estate Properties in Florida and other areas of the country for a number of years.  Their specialty is in Short Sales and Mortgage Debt Negotiation. Visit us at www.realestateprosflorida.com