There was some good news and some bad news in the latest report on third-quarter 2011 home loans. The good news is that 88% of 32.4 million US first-lien mortgages are current. Things get a little worse from there.
The report from the Office of the Comptroller of the Currency notes:
[T]he number of new foreclosures increased by 21.1 percent during the quarter as servicers lifted voluntary moratoria implemented in late 2010 and exhausted alternatives to foreclosure for the large inventory of seriously delinquent mortgages working through the loss mitigation process. Â The increase in new foreclosures and the increase in average time required to complete foreclosures sales has resulted in the number of foreclosures in process increasing to 4.1 percent of the overall portfolio, or 1,327,077 loans, at the end of the third quarter of 2011.
The increase in foreclosures is expected to weigh on the housing market, especially for new homes. Low prices for foreclosed and distressed properties, along with the increase in numbers have been expected once the self-imposed moratorium on foreclosures was lifted.
The press release is here and the full report is here.
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