Not that it is any surprise, but we can clearly see that our situation is far worse than our last crash about 1990.  The data shown is through Q2 2009 (seasonally adjusted), directly from the Federal Reserve Board's web pages.  However, given the increase in unemployment, I can only imagine that the delinquency rate is growing.  (I'll post Q3 as soon as I see it come out.)  In fact, going back to 1990-1991, we can see that there was a "slowing" in delinquencies before the peak in Q2 1991.  When we look at the present data, there is no slowing.  In fact, it looks like continued acceleration.  I will guess that for Q3 we will be over 9 for mortgage delinquencies.

Banks and any reliance on government programs are not going to be able to handle this rate of increase.  Not only will their loss mitigation departments for loan modifications not be able to keep up, but their REO departments are going to be hard pressed as well.  Besides the social engineering aspects, I think it likely that the only thing holding back a wave of foreclosures is the banks inability to process them fast enough.

Unfortunately, this is a national chart, so it is impossible to say how this will affect any given area... but it sure doesn't look good.

Robert T. Boyer, Ph.D. Licensed Realtor® #010791063 RobertBoyer.Realtor@gmail.com

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