Mortgage Delinquencies Q2 2009
Here are some fantastic data from the CDPE organization which closely tracks national industry numbers.
As of Q2 2009, here are some numbers for you to digest
Type of Mortgage In Foreclosure In Default (30+ Days late) Total
All Mortgages 4.3% 8.86% 13.16%
Sub Prime Mortgages 15.05% 25.35% 40.40%
Prime 3.00% 6.41% 9.41%
It’s not surprising to see that sub-prime loans represents over 40% of distressed properties out there. As of the end of Q2 2009, however, distress in prime mortgages (or the Mercedes of mortgages) represent roughly 1/4 of the volume of sub-primes mortgages. This may surprise some people, as we have been repeatedly told by the media, that sub-prime market is what brought our economy down. However, with National Unemployment at 9.4% (as of July 09 when these stats were released) , it is no longer those who gambled on high risk mortgages, but the regular people who were doing the responsible things, who are being forced into default.
I believe the sector of mortgages to look out for in the coming months is the prime market. I argue they will rise dramatically in numbers, relative to sub-prime mortgages.
Additional statistic I want to point out are marked in red above. 4,760,000 represents the total volume of home sales NAR predicted for 2009. 9,550,000 represents the total distressed properties in the nation as of Q2. This means if these distressed properties have to be sold to get homeowners out of their situation (either as a short sale or foreclosure), it will take over two years to unload the current inventory of distressed properties!
Some food for thought………
