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Mortgage delinquencies down from recession peak

In the last post, this blog discussed the effect one 30-day late mortgage payment can have on an overall credit score. The news says that the economic recovery seems to be underway, but many Ohio residents continue to struggle with high debt.

Recent reports suggest that overall delinquency rates on home mortgages saw improve last year, when compared to 2010. But overall, the improved numbers are only about half way to reaching pre-recession levels, suggesting that many homeowners continue to be at risk for foreclosure.

Mortgage delinquencies dropped to roughly 7.5 percent of all residential loans at the end of 2011, according to the Mortgage Bankers Association. That is a decline from the roughly 10 percent rate recorded at the end of 2010, but only half way to the 5 percent rate experienced before the economic collapse.

In the last post, this blog discussed potential credit report effects of a late payment. While that can be important for many, late payments can have direct and immediate consequences to a tight household budget. The president of an East Coast chapter of the Mortgage Bankers Association says many lenders are likely to start tacking late fees on to a monthly payment as soon as the grace period ends. The timing and fee schedules can vary from loan to loan.

While the recent numbers suggesting that home mortgage delinquencies seem to be dropping since the height of the recession, the Mortgage Bankers Association says that 12.63 percent, or one in eight American homeowners, are currently in trouble for potential foreclosure. The number is a national statistic. For individual consumers, a single household budget is of the greatest concern.

Ohio residents struggling under high debt, facing repossession, garnishment, eviction or potential foreclosure can speak with an experienced Cincinnati bankruptcy lawyer to learn whether federal bankruptcy laws can help bring about a fresh financial start in an individual situation.

Source: New York Times, "Paying on Time," Vickie Elmer, March 8, 2012

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