Delinquencies Are High but Recent Loan Origination Performing Well
•Due to Past Lending Mistakes the Bad Loans are still working through the system
•Banker’s Afterthought is nearly always that “Bad Loans are made in Bubble Times.”
•However, the Mortgage Delinquency Rate may have peaked. According to the Mortgage Bankers Association, mortgage delinquencies fell to 9.85 percent in second quarter 2010 from 10.1 percent in the first quarter.
•Various reports suggest good loan performance on recently originated mortgages.
•One-third of homeowners own their homes free-and-clear. They are not included in mortgage delinquency statistics.
•Loan approval is more difficult, which explains better recent loan performance. There is a better approval chance if the borrower stays well within
their budget.
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