2007 Mortgages Failing at Triple the Rate of 2006

Prime loans made in early 2007 are going bad at triple the rate of 2006 loans
By Jim O'Neill,  Newser Staff
Posted Aug 7, 2008 9:29 AM CDT
2007 Mortgages Failing at Triple the Rate of 2006
Graphic shows weekly change in the number of home mortgage loan applications.   (AP Photo)

Mortgages procured in 2007 are souring at a rate nearly triple that of 2006, reports the Wall Street Journal, suggesting that the wallop to the financial system from forclosures could be far from over. Analysis done for the paper finds 0.91% of the prime loans issued in the first part of the year in foreclosure, or more than 90 days past due, after 12 months. Just 0.33% of loans made during early 2006 went bad after a year.

Freddie Mac showed an even sharper increase in delinquencies in the 2007-vintage loans it purchased, the Journal adds—a rate of 1.38% compared to .38% of 2006 loans. Questionable business practices may be a factor in the increase, one analyst says, as mortgage brokers riding the housing boom "realized the game was completely over" and pushed iffy mortgages out the door.
(Read more foreclosures stories.)

We use cookies. By Clicking "OK" or any content on this site, you agree to allow cookies to be placed. Read more in our privacy policy.
Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.