More than 6% of Texas mortgage holders are late with monthly payment, survey finds
September 6, 2007
For thousands of Texas homeowners, the check isn't in the mail. Almost 6.5 percent of the state's mortgage holders are late with their monthly payment, the latest survey finds. That's higher than the national loan delinquency rate of 5.12 percent,
Written by Steve Brown, Dallas Morning News
For thousands of Texas homeowners, the check isn't in the mail. Almost 6.5 percent of the state's mortgage holders are late with their monthly payment, the latest survey finds. That's higher than the national loan delinquency rate of 5.12 percent, the Washington-based Mortgage Bankers Association reported Thursday. Texas ranks ninth among states with the highest late payment rates. The number of Americans who are behind in their mortgage payments is at a record high, according to the second-quarter report. And those numbers don't include the thousands of homes already in foreclosure, according to the association. Many borrowers in Texas and elsewhere have been hit with rising payments because of adjustable-rate mortgages. "There is a clear divergence in performance between fixed-rate and adjustable-rate mortgages due to the impact of rate resets," Doug Duncan, MBA's chief economist, said in Thursday's report. In the second quarter, 18.7 percent of adjustable subprime home loans in Texas were past due at the end of June. If there is any good news, it's that Texas' late loan payment rate is virtually unchanged from a year ago. California, Florida, Nevada and Arizona all saw marked increases in problem loans in the second quarter. "Were it not for the increases in foreclosure starts in those four states, we would have seen a nationwide drop in the rate of foreclosure filings," Mr. Duncan said. The worsening national loan performance was also driven by heavy job losses in Ohio, Michigan and Indiana. Mississippi has the largest percentage of late mortgage payments at 9.33 percent. Michigan is second with 7.55 percent of its home borrowers behind on their payments. Analysts said the problems in the formerly red-hot housing markets of California, Florida, Nevada and Arizona in part reflect speculators walking away from mortgages they can no longer afford. During a five-year housing boom, the prices in these areas surged, creating what many analysts have described as a speculative bubble as investors bid up the price of homes hoping to quickly resell them for a profit. Now with home sales falling, the inventory of unsold homes rising and prices stagnant, some speculators are choosing to default on their mortgages. Another big problem is that an estimated 2 million adjustable-rate mortgages are scheduled to reset this year at sharply higher interest rates, which will cause some monthly payments to double or even triple. This problem is especially severe in the market for subprime mortgages, loans offered to borrowers with weak credit histories. The Associated Press contributed to this report.
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