My Financial Healthcheck

Only 18.7% of borrowers who had their loans modified in the second quarter were delinquent three months later, much better than the 30.7% in the first quarter, mainly due to banks making sure the loan modifications were affordable and sustainable.  Prime borrowers’ delinquency rate jumped 19.6% from the previous quarter, also the number of foreclosures in process topped 1 million for the first time.   November existing home sales jumped 7.4%, most of the increase due to what was originally going to be the last month for the first time homebuyers tax incentive.  At the end of November the average 30 year fixed rate was 4.88%, two weeks in December it rose to 5.125%.  Home prices will continue to fall in 2010, one reason is the tax credit will not be extended and with mortgage rates rising and lending will continue to be difficult.  New homes sales unexpectedly dropped in November, they fell 11.3%, expect them to be flat during the winter if the weather is bad.  The U.S. Treasury lifted a $200 billion limit on the amount it was ready to pump into each of the two mortgage firms Fannie Max and Freddie Mac.  Most troubled homeowners that enter into a trial mortgage modification plan will see their credit scores suffer as a result.  Once borrowers receive a permanent modification, their payment status is listed as current, the delinquency remains on their credit reports for up to seven years.  After four months of gains, home prices flattened in October, they have risen more than 3% since May.