Thursday, September 06, 2007

New foreclosures set 55 year record

After numbers and more important increases like this every person that is using the word "contained" should know better that the wave is coming.....And we are still early in the process.....

So langsam dürfte auch dem letzten Zweifler bewußt werden was da für eine Welle auf die USA zukommt...... Und wir sind immer noch ziemlich am Anfang........

Very reassuring that right now the loan loss reserves are at new lows....

Beruhigend zu wissen das gerade jetzt die Risikovorsorge der Banken neue Tiefen erreicht.....
“for the fifth quarter in a row, reserves failed to keep pace with the increase in non-current loans.” The industry's “coverage ratio” of reserves to non-current loans fell to the lowest level since the third quarter of 2002, while non-current loans posted the largest quarterly increase since the fourth quarter of 1990.
CHICAGO (MarketWatch) -- The number of mortgage loans entering the foreclosure process in the second quarter set another record, according to the latest data from the Mortgage Bankers Association.

According to the group's quarterly delinquency survey, a seasonally adjusted 0.65% of loans on one- to four-unit residential properties entered the foreclosure process during the period, the highest level in the survey's 55-year history. In the first quarter, when the previous record was set, 0.58% of loans entered the process; a year ago, 0.43% entered the process.

Driving the numbers were the states of California, Florida, Nevada and Arizona, said Doug Duncan, MBA's chief economist and senior vice president of research and business development, in a news release.

"Were it not for the increases in foreclosure starts in those four states, we would have seen a nationwide drop in the rate of foreclosure filings.

> Too bad that he didn´t came with this argument during the boom and that he didn´t mention that states like California account for 13% of the US GDP...... Time to report "foreclosures ex foreclosures" or a "core foreclosure rate"......

> Dumm nur das solche Typen nicht wärend des Booms ähnliche Berechnungen aufgemacht haben und das er nicht erwähnt das Staaten wie Kalifornien für ca. 13% der gesamten US Wirtschaftsleistung stehen..... Wir werden demnächst ne "core" Zwangsvollstreckungszahl von ihm zu hören bekommen.....

From Greenberg Why California housing matters

Because the Golden State accounts for 13% of the country's gross domestic product or the total value of all goods and services produced nearly double the No. 2 contributor, New York. That means that what happens in California, home to such growth industries as high-tech, biotech, venture capital and film, doesn't necessarily stay in California.

The impact of slow economic growth, or even recession, in the state will ripple through the rest of the country.

Thirty-four states had decreases in their rates of new foreclosure and the increases were very modest in the states with increases, other than those four," Duncan said.

Duncan said there was a "clear divergence" in performance between fixed-rate and adjustable-rate mortgages because of the impact that rate resets have.

"While the seriously delinquent rate for prime fixed loans was essentially unchanged from the first quarter of the year to the second ( Bloomberg is reporting "In the second quarter, 2.73 percent of prime borrowers made their mortgage payments at least 30 days late, up from 2.58 percent in the first quarter"), and the rate actually fell for subprime fixed- rate loans, that rate increased 36 basis points for prime ARM loans and 227 basis points for subprime loans," he said.

California has 17% of the subprime ARMs in the country and more than 19% of the foreclosure starts on subprime ARMs. California, Florida, Nevada and Arizona have more than one-third of the country's subprime ARMs and more than one-third of the foreclosure starts on subprime ARMs.

According to the survey, 1.40% of all outstanding loans were somewhere in the foreclosure process during the second quarter, up from 1.28% in the first quarter and 0.99% a year ago.

The delinquency rate for mortgages on one- to four-unit proprieties was 5.12% in the second quarter, up from 4.84% in the first quarter and 4.39% a year ago.

Disclosure: Short KBW Mortgage Finance Index

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Anonymous Anonymous said...

Hi jmf! Good post. Between the Californicators and the Wall Street grifters we are doomed for certain.

12:02 PM  
Anonymous Anonymous said...

great blog , keep up the good work !!!

12:37 PM  
Anonymous Anonymous said...

The market seems to have this news already "priced in".


12:39 PM  
Blogger jmf said...



"priced in"

Barry has a great post about this

A Thought Experiment


I have to reverse my earlier comment from last week that i´m disappointed with the move in gold in the miners....

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