From the Record:
The Federal Reserve Bank of New York issued a report Friday that sheds light on the condition of subprime mortgages in New Jersey, and it’s not a pretty picture.
Nine percent of more than 63,000 securitized adjustable rate subprime loans in the state were in foreclosure in August, according to the first-of-its kind report to track the condition of loans given to non-prime borrowers in New York and New Jersey.
Being in foreclosure means that lenders had initiated steps to repossess the property.
Nine percent of 63,000 loans represents about 5,670 homes in foreclosure.
The Fed estimates that securitized subprime loans include about 75 percent of all subprime loans. Securitized means bundled together and resold to investors as mortgage-backed securities.
Payments on only 67 percent of the loans — which totaled $16.5 billion in outstanding balances — were up-to-date.
“More than 30 percent in arrears is a striking number,” said Keith Gumbinger, vice president of HSH Associates in Pompton Plains, a publisher of financial information.