Mixed Signals in Foreclosures

The Mortgage Bankers Association released some new data on our housing troubles last week, giving the beleaguered industry some mixed signals. The delinquency rate on residences dropped 17 basis points in the fourth quarter of 2009, to a seasonally adjusted 9.47 percent. The delinquency rate tracks mortgages that are at least one month behind in their payments but have not yet gone into foreclosure - troubled mortgages, you might say. The percentage of loans on which the foreclosure process started also dropped slightly.

That's the good news. The bad news is that the combined percentage of loans either in delinquency or in foreclosure reached an all-time record in the fourth quarter of 2009. The percentage of loans that are 90 days past due also set a new high.

There is a reason to think that the most important of these figures is the number of delinquencies; that's the starting point of the whole downward spiral, houses don't go into foreclosure until people miss that first payment. But that's not the only point of demarcation - lots of people miss a mortgage payment without having their home go into foreclosure. The Mortgage Bankers are trying to spin this report as good news, but it's closer to a holding pattern.