Mortgage analytics firm CoreLogic is reporting, in data provided to HousingWire, subprime delinquencies are steadily trending downward; though the firm’s main economist warns the performance of prime mortgages may be a growing concern, especially considering economic hardship can suddenly hit any American family, regardless of the types of housing debt they hold.
Overall, the numbers show that despite the decrease in volume, subprime mortgages still account for the grand percent of current delinquent loans and foreclosures across the board.
As of June, 39.6% of the subprime loan market is 60 days delinquent — 35% of that is 90 days delinquent, 13% of that are now in foreclosure and 3.8% of mortgages are real estate owned.
But that’s comparable to the nearly 6.5 million prime mortgages that fit into the same delinquency categories, where 60+ day delinquencies are not showing a significant decline and foreclosures continue to steadily inch upward, now passing the 2% mark.
Prime loans, however, made it pass the housing bubble without much default or trouble because or they were not susceptible to price fluctuations. Fleming warned that the impact percentage of delinquent loans in the prime space have been masked because the volume is so huge. Compared to the less than 3.5 million subprime, there are about 40 million prime loans in the marketplace, 6.2% of which were 60 days delinquent in June 2010 and 3% of which were 90 days delinquent.
“If you’re looking at delinquencies and foreclosures by data type you’re comparing 16% versus 40%,” said Fleming in an interview. “But that’s 16% of 40 million loans (prime) versus 40% of only 2 million loans (subprime),” which equals 6,355,506 delinquent prime mortgages versus 950,448 delinquent subprime mortgages.
“Maybe we need policy to look at what kind of loans people have,” Fleming said with regard to decreasing delinquency. “If I were a policy maker I would be focusing law toward the prime space.”