Late Payments Rise in 2005

In its quarterly mortgage survey, the Mortgage Bankers Association reported that the percentage of mortgage payments that were 30 or more days overdue rose to 4.7% from October to December. The previous quarter was not much better at 4.44%, the highest quarter since the second quarter in 2003. The associations survey covers 41.2% of loans originated in the US. Communities that were devastated by hurricanes last year are in the fore front, pushing up the delinquency rates in Louisiana and Mississippi.

Though the last two years of devastating hurricanes may claim most the blame, rising energy costs, including gas and crude oil, can also be held accountable. Though the end of 2005 saw a stabilization of gas prices, electricity prices rose as the winter settled in, lifting borrowers overhead. The housing boom of 2005 also pushed mortgage rates to higher and higher numbers, leaving many borrowers with rates that are too high to manage. Rates that were interest only, along with a cooling in the housing market, are now leaving borrowers with too much house at too much cost.