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 (click "Learn More" to finish the article)...
