Mortgage Updates

Out of all 50 States it was reported today that Hawaii has the lowest over due mortgage payments. The residents tend to pay their bills on time and the percentage of homeowners who fell behind in payments fell from 2.07% to 1.9%.

This is due to mortgage lenders who allowed homeowners to make minimal payments and in some cases skip a payment altogether.

Mortgage bankers believe that as these new products proliferate at the bottom end of the housing market, the risk is that shaky borrowers will overextend themselves.

Meanwhile, Hawaii’s default rate among subprime borrowers — usually lower-income individuals with spotty credit histories, was 5.8 percent in the fourth quarter of 2005, said Mike Fratanoni, senior economist for the Mortgage Bankers Association in Washington, D.C.

The national average was 12.4 percent, he said.

To cover their mortgages, brokers and real estate agents say homeowners are doing everything from foregoing vacations to the Mainland and bypassing their favorite Thai restaurant to pulling children out of private schools and even paring down contributions to 401(k) accounts.

Hawaii’s delinquency rate doesn’t surprise local mortgage bankers.

“Historically, our delinquencies have always been lower than the national average,” said Gayle Ishima, president of the Mortgage Bankers Association of Hawaii. “For one thing, our lenders are a lot more conservative than lenders on the Mainland.”

Source: Pacific Business