Showing posts with label Option ARM's. Show all posts
Showing posts with label Option ARM's. Show all posts

Thursday, October 1, 2009

Over 15% of Option ARM Mortgages Seriously Delinquent

According to this Office of the Comptroller of the Currency Office of Thrift Supervision news release, OCC and OTS Release Mortgage Metrics Report for Second Quarter 2009, in the 2nd quarter of 2009 15.2% of the 900,000+ Payment Option Adjustable Rate Mortgages (Option ARM's) were seriously delinquent and 10% were in the process of foreclosure. Both of these figures are approximately triple the rates for all mortgages. The release defined Option ARM Mortgages as mortgages which "allow borrowers to choose from a variety of payment options each month, including payments that reduce principal, cover interest only, or result in unpaid interest being added to the balance of the loan, resulting in an increased amount owed."

Other important points covered in the release regarding default rates and foreclosures are:
  • The percentage of current and performing mortgages fell by 1.4 percent to 88.6 percent of the 34 million loans in the portfolios of reporting servicers.
  • Economic factors continued to adversely affect credit quality, with delinquencies up across all risk categories—prime, Alt-A, and subprime. The percentage of serious delinquencies increased to 5.3 percent of all loans in the portfolio.
  • Although delinquencies rose, the number of new foreclosure actions remained about the same as in the previous quarter. Total foreclosures in process continued to grow and reached 993,000 mortgages, or about 2.9 percent of the portfolio.
All I have to say is "wow".  This is really bad.  There is no way the real estate market is in any stage of recovery at this point in time.  There will continue to be high levels of foreclosures and short sales for the next few years.

If you are a homeowner in Middle Tennessee who has one of these Option ARM Mortgages and your home is worth less than the amount(s) you owe, please contact me to discuss selling your home via a short sale.  I am a Middle Tennessee short sale, pre-foreclosure (preforeclosure) and foreclosure expert and REALTOR.
  • Rutherford County Tennessee: Murfreesboro TN, Smyrna TN and La Vergne TN (LaVergne TN)
  • Williamson County Tennessee: Brentwood TN and Franklin TN
  • Davidson County Tennessee: Nashville TN and Belle Meade TN
You can find out more information about me via my website and my Active Rain profile Jim McCormack's Active Rain Profile - Short Sale REALTOR and Real Estate Expert.