Almost 12 percent of mortgages in Katrina’s impact zone are more than 90 days behind in their mortgage payments a new study shows. This is 10 percent more than the rate before Katrina came through and devastated the region.
Not surprisingly, the highest level of mortgages behind in their payments is the sub prime market. The rate for the sub prime market is 24.3 percent, while FHA loans are at a default rate of over 21 percent.
It is the highest level of mortgage delinquency recorded in any region since 1972, when the trade group began its quarterly survey of lenders. The foreclosure rate is lower than the national average because many lenders have voluntarily agreed not to begin proceedings to claim the properties while borrowers get back on their feet. However, recovery appears to be taking longer than many had anticipated.
“The numbers are still very high four months after the storm,” said Jay Brinkman, vice president of research and economics for the Mortgage Bankers Association. He said the only comparison that comes close is with Alaska in the early 1980s, during the oil bust. “It’s a once-in-a-century thing, at least I hope,” he said. Before the storm, only about 1.33 percent of mortgages in Louisiana and 1.77 percent in Mississippi were seriously delinquent. via the Washington Post.
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