Mortgage borrowers who have missed at least one payment have increased in number during the second quarter of 2011, according to a report.
Delinquent mortgage borrowers were accordingly up 0.12 percentage points to 8.44 percent. However, the report claimed the figure only reversed the steady improvement seen in 2009 to 2010.
The Mortgage Bankers Association (MBA) considered the rise as not sounding much. But it warned this could stall the recovery in the housing market, which is then expected to take longer time than thought.
The MBA breaks down delinquencies according to their degree of severity, which spans from one payment past due to 60 days late, 90 days late and loans that are in the process of foreclosure proceedings, the final step before foreclosure.
Fortunately, the number of loans that are more than 90 days late, which are the most likely to proceed all the way to bank repossession, fell.
Nonetheless, the number of initial filings moved higher.
The common reasons bothering mortgage borrowers include unexpected medical bill or layoff from work. But borrowers earlier in their default may begin repayment again.
“Delinquencies are mirroring what’s taking place in the employment market,” Jay Brinkmann, the MBA’s chief economist, told CNN.
On brighter side, RealtyTrac, an online marketplace of foreclosure properties, reported last week that foreclosures have plummeted 40 percent lower to over 222,000 units in June 2011 beginning fall last year against the March 2010 high.
The figures indicated a level of ease reached by mortgaged residential properties since the crisis in 2006, though the result does not amount to the total elimination of the negative impacts of the crisis on the economy and on the housing market in a short period of time.
Another reason not to lose hope is the improving performance of the newest loans issued after 2007, which are better than earlier issues.
Mortgages starting from 2005 through 2007 represent 30 percent of all mortgages, but account for 65 percent of defaults.
Delinquency rates are expected to fall dramatically once the issues with these mortgages settle.