Look, Over There

by digby

Sometimes I wonder if the administration decided to do health care this year just to keep us from focusing on this stuff:

The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of 9.24 percent of all loans outstanding as of the end of the second quarter of 2009, up 12 basis points from the first quarter of 2009, and up 283 basis points from one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.
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The delinquency rate breaks the record set last quarter. The records are based on MBA data dating back to 1972.

The delinquency rate includes loans that are at least one payment past due but does not include loans somewhere in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the second quarter was 4.30 percent, an increase of 45 basis points from the first quarter of 2009 and 155 basis points from one year ago. The combined percentage of loans in foreclosure and at least one payment past due was 13.16 percent on a non-seasonally adjusted basis, the highest ever recorded in the MBA delinquency survey.
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“While the rate of new foreclosures started was essentially unchanged from last quarter’s record high, there was a major drop in foreclosures on subprime ARM loans. The drop, however, was offset by increases in the foreclosure rates on the other types of loans, with prime fixed-rate loans having the biggest increase. As a sign that mortgage performance is once again being driven by unemployment, prime fixed-rate loans now account for one in three foreclosure starts. A year ago they accounted for one in five….” said Jay Brinkmann, MBA’s Chief Economist.

How in the hell is this economy going to rebound if the housing crisis just keeps on keeping on? It’s a vicious circle: the housing crisis creates unemployment which creates more housing crisis and on and on.

I’m totally engaged in the health care debate, and think it’s vitally important for the citizens of this country and the Democratic party as an institution. But really, none of that is going to matter if the economy doesn’t adequately turn around and financial reforms aren’t put in place to keep this from happening again, more often and with even more dire consequences. On some level we’re being played and I think most of us know it and don’t want to admit it.

But hey, at least Robert Rubin feels really terrible about everything, so that’s something.

Now back to our regularly scheduled program of chasing our tails.

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