Trepp: Delinquencies Improving Slowly

Trepp
has come out with preliminary estimates for third quarter real estate and
business loan delinquencies.  While final
reports from banks will not be available until the end of the month, Trepp has
pulled together its figures from small bank earnings reports and call report
filings.   

The overall delinquency
rate for single-family mortgages
edged down to an estimated 12.0 during the
third quarter from 12.3 percent in the second quarter and 13.1 percent a year
ago and seriously delinquent loans (non-accrual rates) will be at 5 percent,
the same level as the fourth quarter of 2009. 
 Trepp says the situation is
improving only slowly because of the high volume of foreclosure and weak price
trends.  “Recovery in the market looks
like it will take a protracted period of time, probably measured in years
rather than weeks or months.”

Commercial
mortgage delinquencies
will fall to an estimated 4.6 percent from 4.9 percent
in Quarter Two and the nonaccrual rate will decline to an estimated 3.4
percent.  The rate of improvement in
Quarter Three was slower than in the previous quarter because efforts by
lenders to shed nonperforming assets are being hampered by a weaker economy.

The
delinquency rate for non-real estate commercial loans is estimated at 1.9
percent compared to 2.2 percent the previous quarter, the first time this rate has
been below 2 percent since the fourth quarter of 2008.  The delinquency rate for construction lending
is also retreating and is estimated to be at 15.6 percent in the third quarter,
the lowest rate since the first quarter of 2009.  Early results indicate that most of the
improvement is in the residential construction sector; there was little change in
land and commercial construction delinquencies.

Article source: http://www.mortgagenewsdaily.com/11042011_delinquencies.asp

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