Scary Mortgage Developments

The first bit of news is that the mortgage delinquency rate in the United States has passed 10%.

That's a pretty scary number if you are a mortgage lender.

The second bit of scary news, and it contributes to the first, is that borrowers are increasingly paying off credit cards before their mortgages, with, "percentage of borrowers who are delinquent on their mortgages but paying their credit card bills on time is growing, to 6.6 percent in the third quarter of 2009 from 4.9 percent in the same quarter of 2008."

Part of this may be the bankruptcy changes of a few years back, which make it much more difficult to discharge credit card debt, but a lot of it is also the fact that the mindset has changed, and people are looking at their houses as bad investments, and so are in a "walk away" mindset.

The banks and mortgage brokers rode the bubble by selling homes as investment vehicles, as opposed to shelter, and now, they are dealing with borrowers who increasingly look to their homes in the same way, and are considering "jingle mail" as a way to deal with something that they see as a failed investment.