Drops in Foreclosures and Mortgage Delinquencies Among Pluses in HUD Report

Published by nora | Filed under Buyer / Seller Tips, Market Trends, Miscellaneous, Mortgage / Finance, Real Estate

The continued decline in foreclosure actions and the year-over-year drop in mortgage delinquencies are just two of the positives in the housing market report released by the HUD for the month of February.

The overall number of housing units hit with foreclosure filings dropped in February from 315,700 units in February last year to 261,300 units, representing a significant drop of 17.23 percent. The drop from December 2008 was also significant as there were 303,400 units that received foreclosure and default notices during this month.

The delinquency rates for home loans also decreased in February compared to February last year, with the delinquency rate for prime loans dropping from 6.7 percent in February last year to 4.8 percent during the same month this year. The delinquency rate for FHA loans fell from 15 percent to 12.8 percent and the delinquency rate for subprime loans decreased from 39.2 percent to 36.4 percent.

Loans counted as delinquent are those in default by more than 30 days but not yet in foreclosure. Delinquency rates for prime and subprime loans are being monitored by LPS Applied Analytics while delinquency rates for FHA loans are being monitored by HUD.

Although all the three types of delinquency rates monitored by HUD dropped, the rate for subprime loan was still extremely high, nearly eight times the delinquency rate for prime loans. This is another proof for the assertion that mortgages not processed according to sound underwriting standards are most likely to succumb to financial difficulties and ultimately default.

In addition to the decreases in delinquency rates and foreclosure filings, the following are the other positives in the HUD report:

• The mortgage rate for 30-year fixed rate loan still below 5 percent.
• Housing affordability increased year-over-year.
• Sales of existing homes surged over the month and over the year.
• The number of first time home buyers rose over the month and over the year.
• Originations for non-FHA-backed home purchase loans surged over the month.
• The number of underwater borrowers dropped over the month.

As home prices nationwide continued to drop, the housing affordability index surged from 176.6 from February last year to 185.3 in February this year. The index is approaching the level of 200, which is double the level of 100, the point at which a median-income family has the exact level of income to be able to afford a median-priced home.

The increase in the supply of great homes that have become affordable to many people is also ironically among the positives that arose from the housing crisis. In Tampa, plenty of affordable homes for sale can be explored with the help of Tampa4U.com realtors.

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