It is NOT just a subprime problem anymore
Mortgages, The Economy, Real Estate May 9th, 2008
I found this on USAToday:
The first concrete evidence that delinquencies on mortgage bills have spread well beyond those with subpar credit shows that even prime borrowers have increasingly fallen behind on their house payments.
About 2.3% of prime loans were 60 days’ past due in February, the highest level in at least a decade, according to data from FirstAmerican CoreLogic LoanPerformance. That’s up from 1.4% a year ago.
Some economists, such as Brian Bethune of Global Insight and Dean Baker of the Center for Economic and Policy Research, say they think delinquencies on prime loans have likely risen further since then.
“We’re seeing the prime area coming under pressure, with delinquencies moving up,” Bethune says. “We’re in uncharted territory, and it’s definitely been affecting the prime market, although it’s still not anywhere as severe as in the subprime market.”
Still, even among prime borrowers, not just delinquencies but also foreclosures are up. From the fourth quarter of 2006 to the fourth quarter of 2007, the rate of foreclosure filings for prime adjustable-rate mortgages rose from 0.41% to 1.06%, the Mortgage Bankers Association says. The rate of foreclosure filings for prime fixed loans rose from 0.16% to 0.22%. Prime ARMs represent 15% of loans outstanding and 20% of foreclosure filings.
