The Mortgage Bankers Association released their quarterly report of the mortgage industry Wednesday, noting a rise in mortgage lates.
From the July to September quarter, the percentage of mortgages with 30 day lates or worse rose to 4.67% from 4.39% last quarter, the highest level since the fourth quarter of last year which Hurricane Katrina had a lot to do with.
Borrowers with subprime loans saw delinquency rates of 12.56%, the highest in 3 years. And subprime borrowers in adjustable-rate mortgages were delinquent at a 13.22% clip.
Not surprisingly, the foreclosure rate also rose, to 0.46%, which is a two-year high.
The simple truth is that exotic loans, option arms, and low start rates are a band-aid, and not a long-term solution for a borrower to finance a home.
And if banks and mortgage lenders continue to lend to under-qualified borrowers, we will see these percentages rise to new highs next quarter.
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