The mortgage meltdown is in full swing, and home foreclosures hit a record high in the third quarter, causing a dismal outlook for financial services and related exchange traded funds (ETFs). The Mortgage Bankers Association did its quarterly snapshot of the mortgage market, and reported the percentage of the mortgages nationwide that started the foreclosure process jumped to 0.78% for the July-September period. The previous quarter was at 0.65%.
Jeanine Aversa for the Associated Press reports that the delinquency rate for all mortgages rose to 5.59%, up from 5.12% the previous quarter. Thirty days past due equals a delinquency and this is the highest since 1986.
Homeowners with weak credit were hit hard, with subprime adjustable rate mortgages entering the foreclosure process at 4.72%, up 3.84% from the second quarter. Late payments jumped to 18.81% during quarter three, up from 16.95% in the second quarter. These borrowers would not be eligible for the Bush administration’s rate freeze come today.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.