Tuesday, July 5, 2011
Housing Inventory Issues?
If you thought housing inventory was under control, you might want to read this.
The latest LPS Mortgage Monitor Report released today revealed that mortgages 90+ days delinquent and loans in foreclosure outnumbered foreclosure sales by a staggering 50 to 1 in May.
In other words, there’s an endless housing supply and not nearly enough demand to keep up with it, even with all the measures being taken to slow it all down.
Severely delinquent loans and foreclosure inventory totaled 4,084,557 at the end of May, while foreclosure sales were just 78,676 at month end.
It gets worse.
Foreclosure sales have been slowing – declines of 96 percent in DC, 80 percent in Maryland, 79 percent in New York, and 75 percent were seen in May.
And inventories of foreclosures in judicial states have increased twice as much as those in non-judicial states over the past year.
33% of Borrowers in Foreclosure Haven’t Paid in Two Years
This is good news for those facing foreclosure, as 33 percent of homeowners haven’t made a mortgage payment in over two years.
That’s a lot of free rent.
Oh, and negative equity continues to be a major concern, with nearly 30 percent of current loans underwater (hello short sale).
LPS noted that significantly underwater mortgages are defaulting up to 10 times more than loans with some home equity.
The only sliver of good news is new problem loans, defined as loans that were current six months ago and now 60 or more days delinquent, are now more than 50 percent below peak levels seen in 2009.