■During the second quarter, 87.3 percent of mortgages were current and performing—unchanged from the previous quarter but a decline from 88.6 percent in the same quarter a year earlier.On the face of it mortgage delinquencies seem to be stabilizing. But then you see the fact that early stage defaults continue to climb quarter over quarter. Those are future foreclosures with about a 1 year lag because it can take a long time to actually foreclose on somebody. One bright spot was that new foreclosure proceedings were down. However, completed foreclosures were up substantially as the banks finally got around to foreclosing on people. Overall, the report was a mixed bag.
■The number of mortgages that were seriously delinquent (60 or more days past due) and newly initiated foreclosures fell during the quarter to the lowest levels of the last 12 months, but were up from a year earlier.
■Mortgages that were 30-to-59 days delinquent increased during the quarter, consistent with seasonal trends. Early-stage delinquencies increased across all risk categories from the previous quarter, but were down from a year earlier for prime, Alt-A, and subprime mortgages.
■Servicers initiated more than 292,000 new foreclosure proceedings during the second quarter—the fewest new foreclosure proceedings of any of the previous five quarters.
■Completed foreclosures, in which borrowers lost their homes, increased by 7 percent during the quarter to nearly 163,000—a 54 percent increase from a year earlier, as the large volume of seriously delinquent mortgages and foreclosures in process worked through the system.
Black Swan Insights