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Friday, Aug. 26, 2016

Iowans' late payments on mortgages grows

Tuesday, December 9, 2008

DES MOINES - Analysts blame a worsening economy and a spike in job losses for a report that shows Iowa's foreclosure rate fell slightly in the third quarter, but late payments on mortgages grew in the same period.

The report by the Mortgage Bankers Association shows that a record one in 10 home mortgages nationwide was either delinquent or in foreclosure.

In Iowa, the news was a little better: fewer people are in foreclosure than a year ago, and the numbers are down from the second quarter, too.

The bad news, though, is that the number of past-due prime mortgages and subprime loans is up, as is the number of prime mortgages and subprime loans in foreclosure compared to a year ago.

"One of the first places economic distress shows up is past-due loan payments," said John Sorensen, chief executive of the Iowa Bankers Association. "We would hope it would not mean additional foreclosures."

The state's foreclosure rate fell to 2.03 percent in the third quarter, compared with 2.05 percent in the second quarter. Last year at this time, the percentage of Iowa mortgages in foreclosure was 1.83.

"It depends on how deep and prolonged this recession is," Sorensen said. "What happens to employment numbers plays a big role here."

An organizer with the Des Moines Citizens for Community Improvement, who often works with troubled borrowers with subprime loans, said the trend could start going the other way - delinquencies and foreclosures could lead to job losses.

"It will just compound itself," said Chris Neubert of the DCCI.

In Iowa, 10.84 percent of subprime loans were in foreclosure, the third-quarter report showed, climbing from 9.38 percent a year ago.

"The economic outlook is foreboding - in terms of jobs, income and investments," said Iowa attorney general spokesman Bob Brammer. "So, are more people going to get in trouble? Yeah."

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