Home Loan Defaults Up
Minneapolis, MN: Home mortgage loans defaulted at a higher rate in the last quarter of 2012. This is unwelcome news compared to an overall trend of good news in the housing and real estate market
Homeowners defaulting on the home mortgage loans has increased for three consecutive months after hitting a post-recession low in September, according to a recent report. Mortgage defaults averaged1.36 percent of all loans in September 2012. Since then, defaults on home mortgages rose to 1.47 percent in October, 1.58 percent in November and 1.68 percent in December.
Experts are confused as to why this is happening, as the general housing market has been improving. Foreclosures have been on the decline. New homes sales are up, and with the continuance of historically low mortgage interest rates, first-time home buyers have been snapping up low priced real estate for some time now.
2012 showed a nice improvement in the quality of consumers loans, like cars and credit cards, but first and second mortgage loan defaults have been holding the overall default rate up.