"You've Caught the NET!"

Just when you were hoping for some good news in the real estate market, you hit the web, and find more distressing news.

Across the U.S. nearly 10% of homeowners fell behind on their mortgage payments during the First Quarter of this year!  This comes from statistics compiled by the Mortgage Bankers Association, and released last Thursday.

Recent drops in home value, here in Chicago and elsewhere, have left many homeowners owing more on their mortgages than their house is worth.  This is especially true for those who borrowed with high leverage within the past few years.

Here are some of the troubling statistics -

6.35% of the 45 million homeowners surveyed by the Mortgage Bankers Association were at least one house payment past due, compared to 5.82% in the Fourth Quarter, 2007 - a jump of 9%.

During the First Quarter, 2008, 0.99% of homeowners were notified that foreclosure procedures had started against their homes.  This compares to 0.83% during the final quarter of 2007 - an increase of 19%.

In all, 2.47% of all home loans were in foreclosure during the first quarter of this year, compared to 2.04% of homes at the end of December, 2007 - a more than 21% increase!

The type of loan (prime or sub-prime) has considerable bearing on the likelihood of the homeowner facing delinquency or foreclosure. 

MBA's statistics indicate sub-prime loans comprise about 6% of outstanding home loans today - and represent about 39% of total foreclosures.   Conventional loans comprise only 23% of those homes in the midst of foreclosure.

Late payments as a percentage of those with sub-prime loans is 22.07% of the total, up from 20.02% at the end of last year.

"The No. 1 problem is the drop in home prices," says Jay Brinkmann, Vice President for Research and Economics for the Mortgage Bankers Association.   Declining prices, especially in newer-built areas, "are hurting people's ability to recover when they run into trouble."

See our post today at BlogChicagoHomes.com for more info, and a link to last Friday's article in The Chicago Tribune from Chicago Tribune News Services.

DEAN & DEAN'S TEAM CHICAGO