Another scary chart

[AllentownJake]

[CoffeeCat]

1. Maybe it's just me...

...but this chart indicates a 4 percent rise in Fannie Mae loans that are seriously delinquent--from 1998-2009.

A rise is not good, but this chart looks makes the delinquicies look like they skyrocketed into some freakish territory in
the past ten years. Going from .5 percent to 4.5 percent isn't exactly earth shattering, as this chart's visuals seem
to suggest.

This is bizarre. I know it's super early--but I see a very misleading chart.

[The Court Jester]

2. 900% increase

That is actually a 90% increase, or there are now 9 times as many loans in trouble as before. Not hard to understand why, people who lose jobs are not making as much on unemployment. And some people can't even qualify for unemployment, myself included. The last three years have been our worst family income levels in over 30 years.

[AllentownJake]

3. Actually

It shows over a 300% increase in the percentage of deliquent loans from 2008.

When you are viewing percentages you have to look at the uptick in the number to understand the impact of increases. The percentages are good because it give you a number out of total loans outstanding.

If you took total loans deliquent hard numbers you would see a delequincy rate increase of over 300 because you would be looking at the number of loans deliquent in 2008 compared to 2009 not including the loans that are not deliquent, this number would not be weighted though for the fact that more loans were made in 2009 that is why ratios like this are used.

[KharmaTrain]

4. So Will The Government Foreclose???

Is that what's being hinted here? The credit crunch is still biting hard and the banks have run amok raising interest rates, especially on credit cards. It's resulted in the most vulnerable economically going deeper and deeper in the hole. Even though caps will be in place, I don't see the government stepping in to roll back those loan-sharking rates and its at their peril as your graph shows. The ancillary effect is people who do lose homes are forced into a rental market (that also is price gouging these days) or into the vast underworld of the homeless. We volunteer at a local shelter and even though we live in an affluent area there have been times where there's been no room to handle all those seeking a roof over their heads and for their families. It's depressing to see proud people who are forced into this situation...and in many cases not due to their own actions other than to get caught in the spiral of rising interest rates.

There needs to be a lot more action on forcing down interest rates and pushing for renegotiations on ALL mortgages that have seen their rates rise by more than 100% in the past 3 years. If not, that chart will be twice as big in six months.

[AllentownJake]

5. There are various factors in this

Unemployment, falling home values, and ARMs.

People who are unemployed can't afford what they used to be able to afford so these people might be forced into foreclosure.

People whose houses are underwater have no incentive to keep paying their mortgage, even if they can afford to do so. If you have a 300,000 loan and your house is now worth 150,000 you really have no incentive to continue to make payments.

ARMs are resetting so people who could afford payments before the resetting now can no longer afford to make payments.

So you have three factors going on contributing to an increase in foreclosures.

The government and the industry have done a piss poor job at addressing this. In fact some policies, particularly allowing accounting rules surrounding valuation, encourage what is happening right now.