Families Feel the Pressure as Mortgage Delinquency Rates Rise

[Pale Blue Dot]

Delinquency and default rates on loans and personal bankruptcy rates are still at comparatively low levels—only 4.7 percent of all loans in the third quarter—but they have been rising rapidly over the course of this year. Other measures of financial distress are also pointing one way for American families—up. With all pieces of the trifecta staying in place, rising delinquency rates on mortgages may be the beginning of a trend toward more middle class financial insecurity.

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The intersection of these disadvantageous trends is already taking its toll on middle class families. The Mortgage Bankers Association report yesterday showed that delinquencies on mortgages increased to 4.7 percent of all loans in the third quarter of 2006 from 4.4 percent of all loans in the first and second quarter of the year. The share of loans that were in foreclosure rose to 1.1 percent, the highest level since 2004.

Other measures indicate similar trends toward increased financial distress for America’s families. The default rate on credit cards grew to 3.9 percent in the third quarter of this year from 3.5 percent in the second quarter and 3.0 percent in the first quarter. These levels are below the highs of prior years, but are clearly rising rapidly.

The data on bankruptcy rates also show a worrisome trend over the course of 2006. Bankruptcy rates dropped precipitously in 2006 in the wake of large filings in 2005 just before the new bankruptcy law went into effect. However, from the first quarter of 2006 to the second quarter, the annualized personal bankruptcy rate, measured as bankruptcy cases relative to the U.S. population, grew from 1.2 in 1,000 to 2.0 in 1,000—an increase of 33.7 percent. The bankruptcy rate in the third quarter stood at 2.2 in 1,000, an additional increase of 9.6 percent in that quarter alone.

http://www.americanprogress.org/issues/2006/12/delinquency.html

This is another piece of the puzzle which I believe leads to a dramatic downturn in the economy soon.

[tanyev]

1. I'm guessing we won't see Focus on the Family or the

American Family Association too riled up about this, though.

[OrangeCountyDemocrat]

2. My Fundie Secretary Is Getting Calls From Creditors

She lives literally paycheck to paycheck. In fact, since she's delinquent, she really doesn't.

On Monday she told us that they're so strapped they couldn't make their Property Tax payment on time.

But, the economy is still working for her, and the repubs are doing a great job I guess. SCHMUCK!!