by Calculated Risk on 8/09/2012 12:13:00 PM

A few comments from Jay Brinkmann, MBA’s Chief Economist and Senior Vice President for Research and Education, on the Q2 MBA National Delinquency Survey conference call.

• The 30 day delinquency rate is back to normal (at the long term average). (This means a normal amount of loans are going delinquent each month)

• This was a slight increase in overall delinquencies (Seasonally Adjusted), and he wouldn't read too much into the increase because the seasonal adjustment might be a little off right now.

• Foreclosure inventory continues to decline. In previous quarters the decline in non-judicial state inventory was offset by increases in judicial states. The change this quarter is the non-judicial states are also a decrease in foreclosure inventory.

• There was a sharp increase in FHA foreclosure starts, and this is probably a result of the mortgage settlement.

Click on graph for larger image in graph gallery.

This graph is from the MBA and shows the percent of loans in the foreclosure process by state. Posted with permission.

The top states are Florida (13.70% in foreclosure down from 14.31% in Q1), New Jersey (7.65% down from 8.37%), Illinois (7.11% down from 7.46%), New York (6.47% up from 6.17%) and Nevada (the only non-judicial state in the top 13 at 6.09% down from 6.47%).

As Jay Brinkmann noted, California (3.07% down from 3.29%) and Arizona (3.24% down from 3.57%) are now a percentage point below the national average.

The second graph shows the percent of loans delinquent by days past due.

Loans 30 days delinquent increased to 3.18% from 3.13% in Q1. This is at about 2007 levels and around the long term average.

Delinquent loans in the 60 day bucket increased to 1.22% in Q2, from 1.21% in Q1.

The 90 day bucket increased to 3.19% from 3.06%. This is still way above normal (around 0.8% would be normal according to the MBA).

The percent of loans in the foreclosure process decreased to 4.27% from 4.39% and is now at the lowest level since Q1 2010.

A final comment: I asked Jay Brinkmann if he thought the pace of improvement for the foreclosure inventory would pickup - or stay at this rate (about 6 to 7 years back to normal). Mr Brinkmann said that this is now more of a judicial state problem, with states like New York and New Jersey having very high levels of foreclosure inventory, and non-judicial states (except Nevada) in much better shape.

Note: "MBA’s National Delinquency Survey covers 42.5 million loans on one-to-four-unit residential properties, representing approximately 88 percent of all “first-lien” residential mortgage loans outstanding in the United States. This quarter’s loan count saw a decrease of about 337,000 loans from the previous quarter, and a decrease of 1,378,000 loans from one year ago. Loans surveyed were reported by approximately 120 lenders, including mortgage banks, commercial banks and thrifts."

by Calculated Risk on 8/09/2012 10:00:00 AM

The MBA reported that 11.85 percent of mortgage loans were either one payment delinquent or in the foreclosure process in Q2 2012 (delinquencies seasonally adjusted). This is up slightly from 11.79 percent in Q1 2012..

From the MBA: Mortgage Delinquencies Increase in Latest MBA Survey

The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 7.58 percent of all loans outstanding as of the end of the second quarter of 2012, an increase of 18 basis points from the first quarter, but a decrease of 86 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.

The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans on which foreclosure actions were started during the second quarter was 0.96 percent, unchanged from last quarter and from one year ago. The percentage of loans in the foreclosure process at the end of the second quarter was 4.27 percent, down 12 basis points from the first quarter and 16 basis points lower than one year ago. The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 7.31 percent, a decrease of 13 basis points from last quarter and a decrease of 54 basis points from one year ago.
...
Jay Brinkmann, MBA’s Chief Economist said, “Mortgage delinquencies were up only slightly over the last quarter. Perhaps more important than the small size of the increase, however, is the fact that it reversed the trend of fairly steady drops in delinquencies we have seen over the last year. This is consistent with the slowdown in the economy during the first half of the year and our stubbornly high unemployment rate. Whether this is just a temporary blip or a sign of a true change in direction for mortgage performance will fundamentally depend on the direction of employment over the remainder of the year.”

Note: 7.58% (SA) and 4.27% equals 11.85%.

I'll have more later after the conference call this morning.

by Calculated Risk on 8/09/2012 09:09:00 AM

The Department of Commerce reported:

[T]otal June exports of $185.0 billion and imports of $227.9 billion resulted in a goods and services deficit of $42.9 billion, down from $48.0 billion in May, revised. June exports were $1.7 billion more than May exports of $183.3 billion. June imports were $3.5 billion less than May imports of $231.4 billion.

The trade deficit was below the consensus forecast of $47.5 billion.

The first graph shows the monthly U.S. exports and imports in dollars through June 2012.

Click on graph for larger image.

Exports increased in June and imports decreased. Exports are 11% above the pre-recession peak and up 7% compared to June 2011; imports are just below the pre-recession peak, and up about 2% compared to June 2011.

The second graph shows the U.S. trade deficit, with and without petroleum, through June.

The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

Oil averaged $100.13 in June, down from $107.91 per barrel in May. The decline in oil prices contributed to the overall decline in the trade deficit. The trade deficit with China increased to $27.4 billion in June, up from $26.6 billion in June 2011. Once again most of the trade deficit is due to oil and China.

Exports to the euro area were $17.4 billion in June, up from $16.4 billion in June 2011; so the euro area recession didn't lead to less US exports to the euro area in June.

by Calculated Risk on 8/09/2012 08:30:00 AM

The DOL reports:

In the week ending August 4, the advance figure for seasonally adjusted initial claims was 361,000, a decrease of 6,000 from the previous week's revised figure of 367,000. The 4-week moving average was 368,250, an increase of 2,250 from the previous week's revised average of 366,000.

The following graph shows the 4-week moving average of weekly claims since January 2000.


Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 368,250.

This was below the consensus forecast of 367,000 and is near the lowest level for the four week average this year.

And here is a long term graph of weekly claims:

All current Employment Graphs

by Calculated Risk on 8/08/2012 09:19:00 PM

First, a little rent relief coming? From Brady Dennis and Amrita Jayakumar the WaPo: A renter’s respite: In Washington area, thousands of new units to open soon

Thousands of new rental units under construction are scheduled to open in the coming months, the first such wave of new building in the area since the financial crisis hit in 2008.

The coming surge — which includes a whopping 6,000 new units by the end of this year — will give prospective renters a slew of new options and could even halt the upward march of monthly rental payments ...

The projected number of new units would be more than double the number that went on the market in the Washington area during each of the past two years.

Thursday will be busy ...

• At 8:30 AM ET, the Trade Balance report for June will be released by the Census Bureau. The consensus is for the U.S. trade deficit to decrease to $47.5 billion in June, down from from $48.7 billion in May.

• Also at 8:30 AM, the initial weekly unemployment claims report will be released. The consensus is for claims to increase slightly to 367 thousand from 365 thousand. This report has been showing some improvement recently, although it might have been distorted by the timing of auto plant shutdowns.

• At 10:00 AM, the Mortgage Bankers Association's (MBA) will release their 2nd Quarter 2012 National Delinquency Survey.

• Also at 10:00 AM, the Monthly Wholesale Trade: Sales and Inventories report for June will be released. The consensus is for a 0.3% increase in inventories.

Here are two more questions for the August economic contest (both on Thursday).

More game updates: The red line shows the relative number of picks for each option, and people can now login using twitter.