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Mortgage delinquencies still high in hurricane areas

March 15, 2006

But loans entering foreclosure fell in Gulf Coast

Inman News

Nearly 76,000 homeowners in Louisiana and Mississippi were seriously delinquent on their mortgages at the end of December 2005, according to a preview of an industry survey to be released on Thursday.

National mortgage delinquency data from the Mortgage Bankers Association show that overall mortgage delinquencies 30 days past due in the two states have fallen since the month immediately after Hurricane Katrina struck in 2005.

Overall mortgage delinquencies were 24.6 percent in Louisiana and 17.4 percent in Mississippi as of the end of September, but have fallen to 20.8 percent in Louisiana and 16.9 percent in Mississippi as of the end of December, according to MBA. As expected, a majority of the loans that were only 30 days delinquent in September are now in the 90 days or more seriously delinquent category.

In contrast to the delinquency percentages, and as a result of the mortgage industry's forbearance programs, the number of new foreclosure processes started fell to only 0.16 percent of the mortgages in Louisiana and 0.26 percent in Mississippi, down from 0.67 percent and 0.78 percent respectively in the period last year. In comparison, the national average for foreclosures started stands at 0.42 percent.

"A sizable portion of these delinquencies are due to borrowers availing themselves of the forbearance programs many lenders have had in place since September," said Jay Brinkmann, vice president of Research and Economics at MBA. "These programs postpone when mortgage payments are due but do not cancel the mortgage debt. Nevertheless, the fact that we have almost 76,000 people who have not been able to resume making their mortgage payments, most as a direct result of Hurricane Katrina, points to the need to get a housing and economic development program funded and under way in Louisiana, and build support for the initiatives already undertaken in Mississippi."

In Louisiana, 16.1 percent of prime loans were delinquent, 33.9 percent of subprime loans and 31.8 percent of FHA loans. In Mississippi, 11.8 percent of prime loans were delinquent, 31.1 percent of subprime loans and 24.9 percent of FHA loans.

For seriously delinquent loans, those delinquent 90 days or more or in foreclosure, the percentage of prime loans was 9.7 percent, 24.3 percent for subprime and 21.1 percent for FHA, according to MBA. In Mississippi the percentages were 6.3 percent for prime loans, 19.8 percent for subprime and 13.5 percent for FHA.

The complete MBA National Delinquency Survey will be released on Thursday, March 16.

Copyright 2006 Innam News

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