http://pkrealtor.com/blog/categoryname_delinquencies/sort_entrydatetime-desc/  You may be seeing headlines about how foreclosures are rising. And if that makes you nervous that we’re headed for another crash, here’s what you should know. According to ATTOM, during the housing crash, over nine million people went through some sort of distressed sale (2007-2011). Last year, there were just over 300,000.So, even with the increase lately, we’re talking about numbers that are dramatically lower. But what does the future hold? Is a wave coming? The short answer is, no.Here’s why. Experts in the industry look at mortgage delinquencies (loans that are more than 30 days past due) as an early sign for potential foreclosures down the line. And the latest data for delinquencies is reassuring about the market overall.Right now, delinquencies as a whole are consistent with where we ended last year, which means we’re not seeing the kind of increase that would signal widespread trouble.But there are some key indicators to continue to watch. Marina Walsh, Vice President of Industry Analysis at the Mortgage Bankers Association, explains:“While overall mortgage delinquencies are relatively flat compared to last year, the composition has changed.”Right now, borrowers with FHA mortgages currently make up the biggest share of new delinquencies (see graph below):And here’s why that may be happening. Borrowers with FHA mortgages may be more sensitive to shifts in the economy. And with recession fears, stubborn inflation, employment challenges, and more, it makes sense this segment of the market may be feeling it a bit more. But that doesn’t mean it’s a signal a crash is coming.If you look back at the graph, it shows, while there are more FHA loans experiencing hardship than the norm, delinquency rates for other loan types remain low and stable. Back during the crash, delinquency rates were significantly elevated for all 4 categories.That means the broader mortgage market is on much stronger footing than it was back in 2008. As ResiClub says:“The recent uptick in mortgage delinquency seems to be concentrated among FHA borrowers, however, mortgage performance remains very solid when viewed in light of the twenty-year history of our data.”The Region with the Most FHA LoansHere’s another reason this isn’t a signal of trouble ahead. FHA loans only make up about 12% of all home loans nationwide. But like anything else in housing, local data matters. There are some regions of the country where there are more of this type of loan than others, particularly the South.The map below does not show how many FHA loans are delinquent. It just shows the overall concentration of FHA loans by state, so you can see which regions have the greatest volume (see map below):As the Federal Reserve Bank of New York explains:“Looking at geographic concentrations of loans, recent data indicate that a higher proportion of mortgage balances are delinquent in many of the southern states . . . we see that higher delinquency rates coincide with a higher share of FHA loans across states.”Just remember, even the delinquencies rates we’re seeing now aren’t as high as they were in 2008. Again, this is not a signal of a crisis. But it is something experts will monitor in the months ahead. If You’re Experiencing Financial HardshipNo one wants to see anyone face the challenges of foreclosure. But just know that, if you’re a homeowner struggling with payments, you’re not alone – and you do have options.The first step is reaching out to your mortgage provider. In many cases, you may be able to set up a repayment plan or explore loan modifications to help you stay on track. And for many homeowners today, you may also have enough equity to sell your house and avoid foreclosure. Odds are, at least some of these delinquencies will go that route since homeowners today have near record amounts of equity in their homes. It may be worth seeing if that could be an option for you too.Bottom LineForeclosures are rising slightly, but they’re nowhere near the levels of 2008. And delinquency trends don’t point to a crash ahead.This is something industry professionals are going to watch in the days ahead. If you want to stay up to date, let’s connect so you always have the latest information. http://pkrealtor.com/blog/992/what-mortgage-delinquencies-tell-us-about-the-future-of-foreclosures/ Wed, 03 Sep 2025 09:01:55 -0500  One major reason why we’re not heading toward a foreclosure crisis is the high level of equity homeowners have today. Unlike in the last housing bubble, where many homeowners owed more than their homes were worth, today’s homeowners have far more equity than debt.That’s a big part of the reason why even though mortgage debt is at an all-time high, this isn’t 2008 all over again. As Bill McBride, Housing Analyst for Calculated Risk, explains:“With the recent house price increases, some people are worried about a new housing bubble – but mortgage debt isn’t a concern . . .”Today’s homeowners are in a much stronger position than ever before. So, let’s break it down and see why today’s mortgage debt isn’t anything to fear.More Equity, Less Risk of ForeclosuresAccording to the St. Louis Fed, total homeowner equity is nearly triple the total mortgage debt today (see graph below):High equity makes it less likely for homeowners to face foreclosure because they have more options. If someone struggles to make their mortgage payments, they could potentially sell their house and still come out ahead thanks to their built-up equity.Even if home values were to dip, most homeowners would still have a comfortable cushion of equity. That’s a big contrast to the 2008 crisis, where many homeowners were underwater on their mortgages and had few options to avoid foreclosure.Delinquency Rates Are Still Near Historic LowsAnother reassuring sign is that, according to the NY Fed, the number of mortgage payments that are more than 90 days late is still near historic lows (see graph below):This is partly due to a variety of programs designed to help homeowners through temporary hardships. As Marina Walsh, VP of Industry Analysis at the Mortgage Bankers Association (MBA), says:“. . . servicers are helping at-risk homeowners avoid foreclosures through loan workout options that can mitigate temporary distress.”So, even if someone falls behind on their payments, there are support systems in place to help them avoid foreclosure.Low Unemployment Helps Keep the Market StableOne other important factor is today’s low unemployment rate. More people have stable jobs, which means they’re better able to afford their mortgage payments. As Archana Pradhan, Principal Economist at CoreLogic, explains:“Low unemployment numbers have helped reduce the overall delinquency rate . . .”During the last housing crisis, unemployment was much higher, which led to a wave of foreclosures. Today’s unemployment rate is very different (see graph below):That stability in how many people are employed is one of the reasons the market doesn’t have the same risks as it did the last time.There’s no need to worry about a wave of distressed sales like the one we saw in 2008. Most homeowners today are employed and have low-interest mortgages they can afford, so they’re able to make their payments. As McBride states:“The bottom line is there will not be a huge wave of distressed sales as happened following the housing bubble.” Bottom LineWhile mortgage debt is high, rest assured the market isn’t on the brink of another crash. Instead, most homeowners are in a strong position. If you have questions or concerns, let’s connect. http://pkrealtor.com/blog/790/why-today’s-mortgage-debt-isn’t-a-sign-of-a-housing-market-crash/ Mon, 25 Nov 2024 08:10:37 -0500  Even though data shows inflation is cooling, a lot of people are still feeling the pinch on their wallets. And those high costs on everything from gas to groceries are fueling unnecessary concerns that more people are going to have trouble making their mortgage payments. But, does that mean there’s a big wave of foreclosures coming?Here's a look at why the data and the experts say that’s not going to happen.There Aren’t Many Homeowners Who Are Seriously Behind on Their MortgagesOne of the main reasons there were so many foreclosures during the last housing crash was because relaxed lending standards made it easy for people to take out mortgages, even when they couldn’t show they’d be able to pay them back. At that time, lenders weren’t being as strict when looking at applicant credit scores, income levels, employment status, and debt-to-income ratio.But since then, lending standards have gotten a whole lot tighter. Lenders became much more diligent when assessing applicants for home loans. And that means we’re seeing more qualified buyers who have less of a risk of defaulting on their loans.That’s why data from Freddie Mac and Fannie Mae shows the number of homeowners who are seriously behind on their mortgage payments (known in the industry as delinquencies) has been declining for quite some time. Take a look at the graph below:  What this means is that, not only are borrowers more qualified, but they’re also finding ways to navigate through their challenges, exploring their repayment options, or maybe even using the record amount of equity they have to sell and avoid foreclosure entirely.The Answer Is: There’s No Sign of a Wave ComingBefore there can be a significant rise in foreclosures, the number of people who can’t make their mortgage payments would need to rise significantly. But, since so many buyers are making their payments today and homeowners have so much equity built up, a wave of foreclosures isn’t likely.Take it from Bill McBride of Calculated Risk – an expert on the housing market who, after closely following the data and market leading up to the crash, was able to see the foreclosure crisis coming in 2008. McBride says:“We will NOT see a surge in foreclosures that would significantly impact house prices (as happened following the housing bubble) for two key reasons: 1) mortgage lending has been solid, and 2) most homeowners have substantial equity in their homes.”Bottom LineIf you’re worried about a potential foreclosure crisis, know there’s nothing in the data to suggest that’ll happen. Buyers are more qualified now, and that’s one reason why they’re not falling seriously behind on their mortgage payments.  http://pkrealtor.com/blog/697/why-a-foreclosure-wave-isn’t-on-the-horizon/ Tue, 23 Jul 2024 01:02:01 -0500  Have you seen headlines talking about the increase in foreclosures in today’s housing market? If so, they may leave you feeling a bit uneasy about what’s ahead. But remember, these clickbait titles don’t always give you the full story.The truth is, if you compare the current numbers with what usually happens in the market, you’ll see there’s no need to worry.Putting the Headlines into PerspectiveThe increase the media is calling attention to is misleading. That’s because they’re only comparing the most recent numbers to a time where foreclosures were at historic lows. And that’s making it sound like a bigger deal than it is.In 2020 and 2021, the moratorium and forbearance program helped millions of homeowners stay in their homes, allowing them to get back on their feet during a very challenging period.When the moratorium came to an end, there was an expected rise in foreclosures. But just because foreclosures are up doesn’t mean the housing market is in trouble.Historical Data Shows There Isn’t a Wave of ForeclosuresInstead of comparing today’s numbers with the last few abnormal years, it’s better to compare to long-term trends – specifically to the housing crash – since that’s what people worry may happen again.Take a look at the graph below. It uses foreclosure data from ATTOM, a property data provider, to show foreclosure activity has been consistently lower (shown in orange) since the crash in 2008 (shown in red): So, while foreclosure filings are up in the latest report, it’s clear this is nothing like it was back then.In fact, we’re not even back at the levels we’d see in more normal years, like 2019. As Rick Sharga, Founder and CEO of the CJ Patrick Company, explains:“Foreclosure activity is still only at about 60% of pre-pandemic levels. . .”That’s largely because buyers today are more qualified and less likely to default on their loans. Delinquency rates are still low and most homeowners have enough equity to keep them from going into foreclosure. As Molly Boesel, Principal Economist at CoreLogic, says:“U.S. mortgage delinquency rates remained healthy in October, with the overall delinquency rate unchanged from a year earlier and the serious delinquency rate remaining at a historic low… borrowers in later stages of delinquencies are finding alternatives to defaulting on their home loans.”The reality is, while increasing, the data shows a foreclosure crisis is not where the market is today, or where it’s headed.Bottom LineEven though the housing market is experiencing an expected rise in foreclosures, it’s nowhere near the crisis levels seen when the housing bubble burst. If you have questions about what you’re hearing or reading about the housing market, let’s connect. http://pkrealtor.com/blog/569/foreclosure-activity-is-still-lower-than-the-norm/ Wed, 31 Jan 2024 08:49:19 -0500 Some HighlightsWith ongoing high inflation pushing up everyday costs, some people are worried that'll create a flood of foreclosures. Here's why that's unlikely.Fewer people are seriously behind on mortgage payments right now. If foreclosures were going to rise a lot, more people would need to be late on their payments.Since most are paying on time, a wave isn’t coming. If you're concerned about a flood of foreclosures, the data shows that's not likely. http://pkrealtor.com/blog/446/don’t-expect-a-wave-of-foreclosures-[infographic]/ Fri, 18 Aug 2023 10:20:08 -0500