The delinquency rate for prime mortgages over 60 days behind continued to climb from 2.4% in the fourth quarter of 2008 to 2.9% through March 31, 2009 (up from 1.1% at the same point in 2008) as “first-time foreclosure filings on [prime] loans rose 22 percent from the fourth quarter.”
The delinquency rate for prime mortgages in the U.S. has hit a new all-time high (or perhaps low). And overall, “mortgages 60 days or more past due rose 88 percent from last year.” You know, when it was simply a subprime problem.
U.S. Prime Delinquency Rate Doubles, Alt-A Approaches 10% [SocketSite]
Delinquencies Double on Least-Risky Loans, U.S. Says [Bloomberg]

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Comments from “Plugged-In” Readers

  1. Posted by ex SF-er

    Part of this is due to the truly horrific underwriting done back in the day. (lending standards were even lowered for “Prime” lending)
    part of this is due to the recession. (people losing their jobs or their income).
    this will be a problem for the banks (or should I say the taxpayer) due to the sheer size of the Prime mortgage space. Prime loans have a higher average/median balance compared to subprime and also make up a big percentage of the home loan pie. Thus small increases in the foreclosure percentage translate into big losses in dollar terms.
    The bullish/realtor spin on this will be “but 97.1% of homes aren’t delinquent”. of course, this line of thinking doesn’t make any sense, since relatively small changes in foreclosure rates can cripple our economy (as they did in part last year). but our country really likes these idiotic “green shoots” memes… it’s better to be an Ostrich you know. Just tap your heels together three times…
    as a side note: this has been foreseen by anybody with a brain for many years now. As the late great “Tanta” said “We’re all subprime now”. It is for precisely this reason that I’ve stated ad nauseum that RE will be under pressure until at least Dec 2011.
    of course, the bulls will say that it was just a lucky guess. when the next round of bank bailouts begin everybody will say “this was a 6 sigma event! nobody could have known!” as they cash their taxpayer bailout checks and write themselves yet more record bonuses and salaries.

  2. Posted by chad

    @”ex SF-er”
    Why are you lurking here if you are, as your name suggests, an ex SF-er ??

  3. Posted by ex SF-er

    I’m not a lurker. I’ve posted here for years, often prodigiously.
    i’ll just copy and paste my answer to this question from 6 months ago:
    I’ve discussed this before, but I started posting here on accident a few years ago when I thought it was a Chicago blog!
    I keep an interest in SF Real Estate because I’m a born and raised San Franciscan, I love the city, many of my family and friends are there, I’m in SF often, and I may eventually move back. A long time ago I thought I’d move back for sure, but as time goes on that idea is somewhat less appealing to me.
    That said, I’m a doctor and my other half is in a very specialized version of business/tech. there are a few jobs that exist in the Bay Area and not many other places which would force us to move back there (I’m not interested in the other areas that the jobs exist: boston, NYC specifically). but we’ve toggled on whether or not it would be good for our lives to take those kind of jobs.
    I would personally love living in SF if we made 7 figures, as we would if that job still exists. (If we moved back I would probably quit medicine since being a doctor in San Francisco sucks. I’d go into venture capital or something similar)
    so it was a big question: leave our current careers/lives that we love and both go to an ultra high paying job that we may hate so that we can live the ultra-high life? or stay in the midwest where are lives are truly awesome except the winters suck big ass? (especially this winter).
    but all things change with the credit crisis. I foresaw the credit crisis (perhaps by luck) and so decided to hunker down and stay in the midwest until this blows over and we see what kind of financial system is in place at the end. And thus those high paying options are off the table for now (in my mind anyway).
    I may be ambivalent about LIVING in SF, but I still love the city.
    People have a hard time understanding how I can love SF, but still see all of its numerous faults. but still love it. I would call myself objective. they call me negative. sort of like the optimist who calls the pessimist a “negative” when the pessimist feels they’re being practical.
    Posted by: ex SF-er at January 29, 2009 11:30 AM

  4. Posted by eddy

    People have a hard time understanding how I can love SF, but still see all of its numerous faults.
    As in San Andreas, Hayward, etc… 🙂

  5. Posted by NoeValleyJim

    ex SF-er is one of the most consistently reasonable and well-thought out posters on the site.
    What was the delinquency rates for prime loans in the last big real estate downturn (90-91)? Is this higher than that?

  6. Posted by anon

    Totally off-topic, but I’m curioius, why does being a doctor in SF suck?

  7. Posted by Dan

    I’m also a doctor in SF, and I don’t think being a doctor here sucks. Unlike ex-SFer, I don’t need a 7-figure salary to be happy in the City, though.
    If I lived in the Midwest, I would make substantially more money and the cost of living would be substantially lower. But I love living here in SF, and it’s my home, so I wouldn’t consider moving.

  8. Posted by anon

    Dan, why do Midwest doctors make more than SF doctors? On the surface, that’s totally counter-intuitive as every other profession I’m aware of, including my own, pays much, much, much more here to partially compensate for the cost of living.

  9. Posted by Morgan

    Anon, doctors are not the only profession that are paid more in the Midwest. Our firm’s Chicago office pays licensed architects with 10 years experience about 22% more than our San Francisco office. Trust me,

  10. Posted by Sb

    anon, there are a number of reasons but it all boils down to this: people will sacrifice a lot just to live in SF. You will be competing with these people.
    Employers don’t have to pay more attract new hires from other areas. Just running a business in SF costs more, leaving less for payroll. Cost of living here is MUCH higher, especially with any sort of standard of living, so you keep less of your smaller paycheck.
    A professor told me when I graduated, “if you want to make any sort of money in engineering, move the hell away from the coasts.” It’s good advice. I ignored it though — I like the coasts too much.

  11. Posted by adk

    Chicago isn’t the midwest according to the people I know who live there, lol. Interesting that this suggests that b/c there are more doctors (and engineers) in SF, wages are lower than other areas. For most other professions wages are higher (although overall standard of living is less due to high coastal costs). I know if I moved anyplace but LA, I wouldn’t make nearly as much (I’ve looked) but although I might only make 1/2 as much in say Chicago, I could buy a place for 1/3 the cost of SF.

  12. Posted by anoncurious

    ADK, what profession are you in that allows your pay to be double what it would be in a city like Chicago? I think salaries in San Francisco are very high on average, but for job seekers, the market is much better right now in cities outside of California. What we are seeing is that job seekers in San Francisco are willing to accept much less than they were making at their previous position. There are a LOT of professionals looking for work in the Bay Area right now.
    You are also correct to factor in the cost of living, for if a salary was identical in a “Chicago” or “Denver”, your lifestyle could be much greater since the cost of housing is so much less.
    Since most San Franciscans work in Tourism, Government and Education, I think on average the high wage jobs are not available here as is commonly believed.

  13. Posted by Jimmy (No Longer Bitter)

    adk — the whole argument is nonsense! You pay more for housing here, but eventually (30 years later) it’s paid off and you get to keep the extra money you’ve “saved up” by buying the place. Why would you move someplace where you earn less money? If you did that, at the end of the day, you would have less money. That’s bad.

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