Mortgage Delinquencies Hit Record
June 12, 2001
A popular government insurance program which helps people buy moderately-priced homes with only a small down payment may be responsible for a surge in mortgage delinquencies to an all-time high, housing analysts speculate.
- More than 10 percent of mortgage loan payments were more than 30 days late at the end of last year, according to a survey by the Mortgage Bankers Association.
- Even during the recessions of the early 1990s and early 1980s, the delinquency rate did not exceed 8 percent.
- About 400,000 more families were at least 30 days late on their mortgages in the early months of this year, compared with the beginning of 2000 -- and that does not include "subprime" mortgages held by people with low incomes or spotty credit histories.
- The federal government has been pressuring banks to make more loans available in poorer communities, and, thus, homeownership rates have risen to a record 67.5 percent.
Officials at the Federal Housing Administration, which administers FHA loans, said some of the mortgage problems could be expected because delinquencies usually rise between three and seven years after a loan is made.
Source: David Leonhardt, "More Falling Behind on Mortgage Payments," New York Times, June 12, 2001.
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