A faint sign of hope for our weakened U.S. economy appeared last week with a report from the Mortgage Bankers Association that the delinquency rate on mortgage loans fell at the end of 2009. The decreased delinquency rate shows that fewer homeowners fell behind on their payments.
The rate of delinquencies on mortgages for residential properties, from single family homes to fourplexes, fell to 9.47% in the last quarter of 2009. This was a decrease from the rate of 9.64% in the third quarter of last year.
Last week, in the Los Angeles Times, Jay Brinkmann, the chief economist of the Mortgage Bankers Association, stated: “We are likely seeing the beginning of the end of the unprecedented wave of mortgage delinquencies and foreclosures that started with the subprime defaults in early 2007…” The article also quoted Mike Larson, a real estate analyst with the global investment firm of Weiss Research, stating that: “This is a key sign that housing market conditions are slowly, grudgingly getting slightly better,” but qualified this perception by explaining: “This does not mean we’ll have a vigorous recovery. We won’t… the unemployment rate remains elevated, and lending standards will remain relatively strict for some time.”
It is rare that the delinquency rate on mortgage loans would fall at a time of year when people in colder climates are worried about the cost of heating their homes, and throughout the nation, people were concerned about enjoying the holiday season. Nonetheless, even experts like Brinkmann and Larson would probably agree that things are more likely to worsen before overall economic health is restored. So, how does all of this affect you?
Are your payments current? The U.S. housing market and our nation’s economy have been severely impacted. Unemployment is rising in 2010. If you happen to be struggling with your mortgage payments, you need to become proactive and not wait for things to get better.
Are there consequences to payment problems? It’s important to realize that late or missed payments on a mortgage loan will damage your credit. The result will cost you in higher interest payments on future loans; assuming you will even be able to qualify for loans in the future.
Are your priorities in order? It is important to take action immediately, once you realize you’re in trouble. The best first step is to clarify your financial situation and measure the seriousness of your difficulty. This requires a full review of your ongoing financial obligations and possibly a sincere appraisal of your lifestyle because it’s the time to sort out your real priorities. You can’t afford to lose your home because you spend too much on low priority expenses
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