Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. He operates the blog MISH'S Global Economic Trend Analysis and believes in the Austrian School of economics.
Keith Jurow, a real estate analyst and author of the Capital Preservation Real Estate Report, pinged me a few days ago with his analysis that suggests long-term mortgage delinquencies are seriously under-reported.
I thought you might be interested in the important clarification I just received from my contact at the NY State Dept. of Financial Services.
A few weeks ago, I sent you the latest update (attached again) of pre-foreclosure notices sent to delinquent homeowners in NYC and LI. I had noticed that 80% were listed as delinquent for less than 60 days. I asked my contact why that percentage was so high when he had been telling me for several years that over 40% of these notices were repeat notices – sent to long-term delinquents.
His response was that for repeat notices, the mortgage servicers often provided the same information as on the original notice. For example, if a repeat notice was sent two years after the initial one, the length of delinquency was not changed from that first one. That was why a second notice where the borrower might be three years delinquent could show a delinquency of 60 days.
This clarification confirmed my belief that many – if not most – of the borrowers were now delinquent for several years.
New York Loan Delinquencies
Out of 65,523 loans, a whopping 52,218 supposedly fall into the 60-days or less delinquent bucket.
90-Day Pre-foreclosure Notices Filed with the NY Department of Financial Services
100% of those 65,523 delinquencies generated a 90-day pre-foreclosure notice.
Mike “Mish” Shedlock