I just read in the KCM Blog that delinquency rates continue to drop at a very good clip. There “shadow” inventory that we’ve all be hearing about is soon to be released, and that will, of course, have an effect on this. However, the best indicator of future foreclosures is the number of households that fall 90 days delinquent on their mortgage payments. This number is falling dramatically.
As the S&P Shadow Inventory Report states:
“Our estimate of the months to clear the shadow inventory reached its peak at 57 months in early 2008. Back then, rising default rates caused a sharp increase in the overall amount of distressed properties. However, first default rates have been falling since March 2009), indicating that fewer loans are becoming distressed.” Information taken from KCM Blog, 8/25/2011
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