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3/31/2012 Bank Delinquencies

March 31, 2012 mortgage delinquencies are showing mixed results.  Based on March, 2012 Call Reports, total delinquencies for all bank-owned residential mortgages (totalling $3.7T) increased slightly while multi-families and commercials continued to drop (see below).

It is interesting to note, however, that if you segregate HELOCs and 2nds from the residential numbers, the resi-1sts actually declined while the 2nds showed some material deterioration.

2nds have heretofore have been relatively impervious to the real estate downturn. Possibly, this was due to tougher underwriting guidelines for these products.  Studies show, however, that even high FICO borrowers have their limits and that when adjusted LTVs rise above 115%, they tend to mail in the keys.  These borrowers may be finally hitting the wall on making their payments on underwater mortgages .  This needs watching.

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