I personally sell a good many forclosures. It can be hard work luckly I have lots of investors. I wanted to know what everyone thought about this article I found.
The risk of mortgage loan delinquencies rose 4.4 percent from the second quarter but remains low compared to 2003-2004 thanks to low unemployment, according to an analysis by First American CoreLogic.
The company's Core Mortgage Risk Index, which estimates the risk of delinquencies due to fraud, collateral risk, house-price dynamics and local economies, "is increasingly driven by the fallout caused by high delinquency rates in the subprime and Alt-A markets," CoreLogic reports.
At 1.05, the delinquency index is well below peaks in excess of 1.2 reached during the third and fourth quarters of 2003. An index of 1 equals the baseline established for the report in the first quarter of 2002.
But CoreLogic's Foreclosure Index was up 12.5 percent from the previous quarter, breaking the 1.7 mark for the first time in the report's five-year history.
"This increase is an indicator that many of the early payment delinquencies identified in the subprime and Alt-A markets, particularly in the 2006 vintage of originations, are ultimately making their way to foreclosure," the report concluded. "In markets where foreclosure activity is particularly concentrated, we expect further downward pressure on local house prices and an increase in the risk of defaults."
Although house-price appreciation remained positive overall in the 381 metro markets tracked in the quarterly report, the rate of price appreciation dropped to less than 5 percent, after exceeding 10 percent in 2004 and 2005.
Prices were falling in 70 of the 381 markets tracked, and appreciation was less than 5 percent in 205 markets. Not since 1998 -- when problems with subprime lenders created a liquidity crisis -- have appreciation rates been this low, the report said.
House-price acceleration -- the rate of change in home prices, whether up or down -- is also moderating after 18 months of decline, evidence that downward price trends at the national level are nearing bottom.
The 10 Florida markets and 14 in California where prices continue to depreciate reflect "isolated house-price corrections, since the fundamental economic climate in these states is sound," CoreLogic concluded.
But falling home prices in the Midwest reflect "more fundamental underlying economic stressors," such as higher-than-average unemployment and wage growth. The highest-risk markets are also exhibiting higher-than-average foreclosure rates, and fraud and collateral risk.
Prices were still rising in eight of the 10 markets identified by CoreLogic as the highest risk. The highest-risk markets were: Detroit-Livonia-Dearborn, Mich. (-.46 percent appreciation); Warren-Troy-Farmington Hills, Mich. (1.21 percent); Memphis, Tenn. (6.63 percent); Youngstown-Warren Boardman, Ohio-Penn. (4.8 percent); Dayton, Ohio (4.42 percent); Grand Rapids-Wyoming, Mich. (1.55 percent); Toledo, Ohio (1.66 percent); Cleveland-Elyria-Mentor, Ohio (4.89 percent); Indianapolis-Carmel, Ind. (-3.5 percent); and Akron, Ohio (6.14 percent).
Prices continued to rise in all 10 markets identified by CoreLogic as those with the lowest risk: Sarasota-Bradenton-Venice, Fla. (2.51 percent appreciation); Orlando-Kissimmee, Fla. (4.19 percent); West Palm Beach-Boca Raton-Boynton, Fla. (3.97 percent); Ft. Lauderdale-Pompano-Deerfield Fla. (5.57 percent); Washington, D.C.-Arlington-Alexandria, Va. (3.51 percent); Virginia Beach-Norfolk-Newport News, Va. (9.18 percent); Richmond, Va. (7.12 percent); Bethesda-Gaithersburg-Fredericksburg, Md. (2.45 percent); Salt Lake City, Utah (12.96 percent); and Honolulu, Hawaii (7.87 percent).
Although Michigan and Ohio dominated CoreLogic's Risk Monitor report for the third quarter, a recent analysis by PMI Mortgage Insurance Co. identified California and Florida as states with the greatest risk. California and Florida were home to 11 of the 15 metropolitan statistical areas identified by PMI as having a better than 50 percent chance of price declines in the next two years.
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