Late mortgage payments, foreclosures rise in Texas

Late mortgage payments, foreclosures rise in Texas

12:00 AM CDT on Friday, August 21, 2009

Texans continued to fall behind on their mortgage payments in the second quarter, and more than one in 10 Texas mortgages are late or in foreclosure.

At the end of June, 8.79 percent of residential mortgages in the state had delinquent payments and 1.84 percent went into foreclosure, the Mortgage Bankers Association reported Thursday.

Both figures rose compared with the first quarter.

Nationwide, a record 9.24 percent of residential loans were delinquent in the quarter. The closely watched measure includes all mortgages that are at least one payment behind. Texas ranks 17th nationally among states when ranked by the percentage of late mortgage payments.

The national average foreclosure rate in the second quarter was 3 percent.

Just four states – California, Florida, Arizona and Nevada – accounted for 44 percent of the nation's new home foreclosures during the second quarter, the Washington, D.C.-based trade group said.

"Florida continues to establish itself as the worst state in the union for mortgage performance, closely followed only by Nevada," said Jay Brinkmann, MBA's chief economist.

In Florida, 22.8 percent of mortgages were delinquent or in foreclosure, and in Nevada 21.3 percent of home loans have past-due payments or are in foreclosure.

In Texas, most of the loans facing foreclosure are subprime mortgages. In the second quarter, 28.49 percent of subprime adjustable-rate loans in the state were past due. That compares with an 8.18 percent delinquency rate for prime mortgages statewide.

About 30 percent of Texas mortgage holders are considered nonprime borrowers, compared with only 19 percent nationwide.

In areas where homeowners now owe more than their property is worth, the potential for foreclosure is larger. In the Dallas-Fort Worth area, just over 30 percent of mortgage holders are underwater, the latest reports show.

"In some areas where a number of borrowers have mortgages that are larger than the current value of their homes, any life events such a divorce or loss of a job are likely to translate into foreclosures until prices in those areas recover, not just flatten," Brinkmann said.

"As for the outlook, it is unlikely we will see meaningful reductions in the foreclosure and delinquency rates until the employment situation improves."

Cited from the Dallas Morning News