by Calculated Risk on 11/17/2009 08:29:00 AM

TransUnion reports that the 60 day mortgage delinquency rate increased to a record 6.25% in Q3, from 5.81% in Q2.

From TransUnion: Mortgage Loan Delinquency Rates on Course to Hit Record in 2009

Mortgage loan delinquency (the ratio of borrowers 60 or more days past due) increased for the 11th straight quarter, hitting an all-time national average high of 6.25 percent for the third quarter of 2009. This statistic is traditionally seen as a precursor to foreclosure and increased 7.57 percent from the previous quarter's 5.81 percent average. While still increasing, this quarter marks the third consecutive period the delinquency rate increase has decelerated. For comparison purposes, the delinquency rate from the fourth quarter 2008 to first quarter 2009 saw an increase of almost 14 percent, and the percent change from first quarter to second quarter 2009 increased by 11.3 percent. Year-over-year, mortgage borrower delinquency is up approximately 58 percent (from 3.96 percent).

Mortgage borrower delinquency rates in the third quarter of 2009 continued to be highest in Nevada (14.5 percent) and Florida (13.3 percent), while the lowest mortgage delinquency rates were found in North Dakota (1.7 percent), South Dakota (2.3 percent) and Vermont (2.6 percent). Areas showing the greatest percentage growth in delinquency from the previous quarter were Wyoming (+17.9 percent), Kansas (+17.4 percent) and North Dakota (+16 percent). Bright spots for the quarter included the District of Columbia, showing a decline in mortgage delinquency rates, down 0.19 percent from the previous quarter.

The MBA will release delinquency data on Thursday.

by Calculated Risk on 11/16/2009 11:55:00 PM

Some late night entertainment from Merle Hazard (other hits include Inflation or Deflation?, Mark to Market and H-E-D-G-E)

Note: Merle will be performing live at the annual convention of the American Economic Association, Sunday, January 3, 2010, 8 p.m. in Atlanta.

by Calculated Risk on 11/16/2009 10:54:00 PM

In June 2008, reader Brian sent me an email that started:

"When the bankers are selecting color schemes, you know a project isn't going well"

He was referring to Deutsche Bank foreclosing on the $3.5 billion Cosmopolitan Resort & Casino in Las Vegas.

Bloomberg has an update: Deutsche Bank Drowning in Vegas on Costliest Bank-Owned Casino

Deutsche Bank AG’s Cosmopolitan Resort & Casino complex in Las Vegas, already the most expensive debacle in the city for a single lender, is now two years behind schedule, $2 billion over budget and under water -- literally.
...
So far, Deutsche Bank has had to write down 500 million euros ($748 million) on Cosmopolitan. ... Further north on the Las Vegas Strip, work halted on the Fontainebleau in June with a bankruptcy filing after its lenders, including Deutsche Bank, refused further funding. The 63-story casino resort is about 70 percent complete.

From bad to worse ...

by Calculated Risk on 11/16/2009 09:47:00 PM

In a report (pdf) titled "Factors Affecting Efforts to Limit Payments to AIG Counterparties", Neil Barofsky, special inspector for TARP, wrote that the "negotiating strategy to pursue concessions from [AIG] counterparties offered little opportunity for success, even in the light of the willingness of one of the counterparty to agree to concessions".

He also concluded that the "structure and effect of the FRBNY's assistance to AIG ... effectively transferred tens of billions of dollars of cash from the government to AIG's counterparties".

Here is a story from Bloomberg: Fed’s Strategy ‘Severely Limited’ AIG Bailout, Watchdog Says

by Calculated Risk on 11/16/2009 03:51:00 PM

From CNBC (added): Stocks Overvalued, Recession Will Return: Meredith Whitney

From American Banker: FDIC Speaks More Softly, Retains Stick

The FDIC changed the name of its cease-and-desist order to the less ominous-sounding "consent order" (a term already used by other regulators) ... David Barr, an FDIC spokesman, said that the traditional cease-and-desist order will be issued to any banks that refuse to stipulate and instead seek an administrative hearing.
...
The FDIC has not made any of the new orders public so far.

A kinder softer name ...