Mortgage delinquencies in Louisiana and Mississippi at record levels

As you might expect, mortgage delinquencies in Louisiana and Mississippi are at an all time high as a result of Katrina. A new report by the Mortgage Bankers Association says that nearly 76,000 homeowners were "seriously delinquent" (90 days or more past due or in foreclosure) at the end of December, 2005. According to the MBA:

"…the fact that we have almost 76,000 people who have not been able to resume making their mortgage payments, most as a direct result of Hurricane Katrina, points to the need to get a housing and economic development program funded and under way in Louisiana, and build support for the initiatives already undertaken in Mississippi," said Jay Brinkmann, vice president of Research and Economics at MBA.

According to the report, "In Louisiana, 16.1 percent of prime loans were delinquent, 33.9 percent of subprime loans and 31.8 percent of FHA loans." (Subprime loans are loans to people with lower credit ratings.)

The report notes, however, that the rate of foreclosure has decreased significantly, and is currently well below the national average. The MBA attributes this to "forbearance" programs initiated by lenders to give Katrina victims a temporary break from making mortgage payments.

And, the MBA sees some positive signs:

"It is also important to realize that a number of homeowners continue to meet their financial obligations despite not being able to occupy their homes or being temporarily relocated for other reasons. These people are putting their faith and money into their expectations of a recovery along the Gulf Coast and those expectations must be met," Brinkmann added.

You probably didn't expect to see a reference to the Mortgage Bankers Association here at Facing South, but this report illustrates a) Katrina's far reaching effects on the economy, and b) that even the most conservative members of the business community are concerned about the pace of the recovery effort and the need for immediate and substantial government funding to help the people of the Gulf Coast.