Dip seen in late home payments for borrowers not in foreclosure
But few can catch up if facing foreclosure
J. Craig Anderson
The Arizona Republic
Jun. 6, 2008 12:00 AM
Arizonans struggling to pay off their home loans fell further behind on mortgage payments in the first quarter of 2008, according to a new Mortgage Bankers Association report released Thursday.
However, fewer borrowers became delinquent for the first time than during the fourth quarter of 2007.
The latest numbers appear to show that while few Arizona homeowners facing foreclosure were able to catch up on late payments, more borrowers who had remained current on their loan repayments through the end of 2007 have continued to pay on time.
“It seems to be that people who were already in trouble can’t get out of trouble,” said Lowell Lilley, director of the Arizona Mortgage Lenders Association.
Nationally, the report showed home foreclosures and late payments set records in the first quarter and are expected to keep rising.
In Arizona, the continued decrease in home values has prevented already delinquent borrowers from improving their financial situation, he said, and most mortgage lenders have yet to adopt new policies allowing them to renegotiate a loan repayment plan before the borrower is in arrears.
“Most of them don’t want to work with them until they are delinquent,” said Lilley, a branch manager for Suburban Mortgage Inc.
Still, a heightened public awareness of the foreclosure threat and new government programs geared toward helping delinquent borrowers may be helping to lessen the next wave of foreclosures, according to one housing official.
Karen Scates, deputy director of the Arizona Department of Housing, has been encouraging troubled mortgagors to call 877-448-1211, a state-operated foreclosure-prevention hotline launched Friday.
Of the roughly 1.21 million outstanding mortgage loans in Arizona during the first quarter, about 65,000 of them had installment payments past due at least 30 days. That’s down from 1.24 million loans with about 68,000 in arrears the previous quarter. As a percentage of total loans, delinquencies also were down in the first quarter but only slightly – about one-tenth of 1 percent.
More significantly, the first quarter saw an increase of about 1 percent in the portion of loans facing serious delinquencies – at least 90 days past due or entering foreclosure.
Scates said other economic factors such as rising gas prices, food costs and utility rates are making it more difficult for borrowers behind on their payments to catch up.
“Families are having to make choices, and it’s not pretty,” she said.
Scates added that foreclosures probably contributed to the overall decrease in outstanding loans, a drop of about 28,000, from fourth-quarter 2007 to first-quarter 2008.