Fewer Delinquencies as Bad Loans Fade Away

 

 

 

Delinquencies are dropping as bad boom loans fade away.  Fewer problem loans are being made and declining levels of negative equity along with shrinking inventories of bad loans from the boom era are contributing to the the reduction in mortgage delinquencies by the largest decline since 2002.

 

According to the May mortgage monitor report from Lender Processing Services, the national delinquency rate continued to fall in May and is down 15 percent since the end of December 2012.

 

Senior VP Herb Blecher at LPS explains that much of this improvement is supported by the fact that new problem loan rates are approaching the pre-crisis average.  Although they are still approximately 1.4 times what they were, on average during the 1995-2005 period, delinquencies have come down significantly from their January 2010 peak.  Blecher goes on to say that fewer problem loans are coming into the system and the existing inventories are working their way through the pipeline.

 

Yes, The market is finally turning around,  but it is important to take the time necessary to plan your home purchase and to keep an eye on interest rates.  

 

Rates have increased recently and the general consensus is that they will continue to do so.   It may be worth it to pay a little more for the property you have your eye on than wait another month or so and possibly pay a higher interest rate.  

 

The rise in interest rates will affect your monthly payment.  Check with your lender to see how this might change the pre-approval letter that you may already have.

 

Nancy Puder is the real estate owner and broker of Signature Properties, in Arroyo Grande, CA.  You may contact her at Nancy@NancyPuder.com or (805)710-2415 She always enjoys hearing from you!