The Foreclosure Report

Multiple Issues Face Borrowers

In Business Las Vegas has this report on borrowers. "Some eye-catching economic statistics were posted last week when the American Bankers Association announced that credit card loan delinquencies reached a record high of 4.81 percent in the second quarter. The delinquency rate in the previous quarter was a nearly-as-dismal 4.76 percent, which had recently been revised upward from an originally reported 4.03 percent."

"'The last two quarters have not been pretty,' James Chessen, the ABA's chief economist said in a statement. 'Gas prices are taking huge chunks out of wallets, leaving some individuals with little left to meet their financial obligations. ... With gas prices still rising, the third quarter is not likely to be any better."

"In the mortgage industry, results were mixed. The Mortgage Bankers Association said mortgage delinquencies reached 4.34 percent at the end of the second quarter, up 3 basis points from the first quarter results. It was down, however, by 22 points from the second quarter 2004. Foreclosures, however, were less frequent in the second quarter, sitting at 1 percent at the end of the period. That's down 18 basis points from the same 2004 quarter and 8 points lower than the first-quarter numbers."

"Still, fears about the impact of two major hurricanes and the familiar specter of energy costs has the MBA taking a cautious outlook heading into the future. 'We expect an uptick in delinquency rates over the next few quarters in the states impacted by Hurricane Katrina,' MBA economist Doug Duncan said. 'The first effects of Katrina on delinquencies should be seen in the 30-to-59-days delinquent category reported in the third quarter, with more complete impacts reflected in the fourth quarter numbers. In addition, higher energy costs may exacerbate delinquency rates starting in the fourth quarter.'"

"The national concerns over high costs are also being felt in Southern Nevada. Last week, advocacy groups told utility company executives and regulators that rising costs are threatening cash-strapped residents. 'My concern is that we are also going through historic times in terms of housing costs,' said Daniele Dreitzer. 'There is no affordable housing out there.'"

"She pointed to the recent..local trend that has seen many apartments converted to condominiums, putting pressure on rents at the remaining apartments. After the meeting, she also pointed out that low-income residents are also facing higher minimum credit card payments..and tougher bankruptcy laws for those who fall behind."

"'I urge you to consider that these are not the only source of increases these people are facing,' she said."

posted by Ben Jones @ 10:46 AM