In Wake of Storms, Mortgage Delinquencies Rise
A strong economy helped buffer the nation’s homeowners from the financial shock waves of Hurricane Katrina - however, mortgage delinquencies jumped in Louisiana and Mississippi during the third quarter because of the record-breaking storm, according to the the Mortgage Bankers Association of America reported.
The trade group said that, nationwide, its July-through-September survey found that 4.44 percent of all mortgages were past due, up slightly from 4.34 percent in the second quarter, but down from 4.54 percent in the third quarter of 2004. However, the delinquency rate in Louisiana as of Sept. 30 was 24.63 percent — the highest level recorded by the trade group since it started its survey in 1972. Mississippi’s delinquency rate leaped to 17.44 percent, the second-highest statewide level on record.
Doug Duncan, the association’s chief economist, said many lenders have instituted forbearance programs - holding off on foreclosure actions to give owners extra time to recover. But he said Katrina, which struck in late August and was the costliest natural disaster in U.S. history, will still probably result in higher foreclosure rates in those states during the next few quarters.
Duncan also noted that the U.S. economy overall grew at a 4.3 percent annual rate during the third quarter, adding an average of 147,000 jobs a month. Unofortunately, reports state that recent housing slump could result in hundreds of thousands of jobs lost. The formber number has helped keep lenders’ loan portfolios relatively healthy despite the disruption of multiple hurricanes in the Gulf of Mexico this year, though higher home-heating bills this winter could fuel delinquency rates in coming months.
Florida home loan delinquencies
Florida’s delinquency rate in the third quarter was 3.6 percent, down sharply from 4.99 percent in the third quarter of 2004, when the state was hit by four hurricanes between mid-August and the end of September. This year’s third-quarter data does not reflect the effects of Hurricane Wilma, which tore across South Florida in October. That area is now suffering from an excess of debt and higher housing costs.
Nationally, loans in foreclosure totaled 0.97 percent of the more than 40 million first mortgages in the survey, down from 1.16 percent in the third quarter of last year and also down from 1 percent in the second quarter of this year. In Florida, the third-quarter foreclosure rate was 0.47 percent, down from 0.78 percent a year ago.
Duncan said Florida’s strong population and job growth enabled the state to recover quickly from the 2004 hurricanes. For this reason, Florida home loans and their success have been in the news a lot recently.
