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Featured Advisor

Srbo Radisavljevic
Managing Principal/Investment Advisor

Edge Portfolio Management


State: IL

At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, following Chicago sports, enjoying ethnic cooking, and serving as a school board member for Norridge School District 80.

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Real Estate Market Trends: New Problem Loans at Six-Year Low

Problem loan rates have fallen below 1 percent for the first time since 2007 in improving real estate market trends reported today. Learn more.

| BY Adriana Reyneri

Rates for new problem loans have fallen to their lowest level in six years, according to real estate market trends reported today by Lender Processing Service, a provider of data, analytics and services to the mortgage lending industry.

The share of new seriously delinquent mortgages – home loans that have fallen at least six months behind on payments – was .84 percent according the LPS March Mortgage Monitor. The falling delinquency rates reflect improving home values and rising equity, according to Herb Blecher, senior vice president for applied analytics at LPS.

“Looking at the March data, we see that borrowers with equity are actually outperforming the national average,” Blecher said in a statement. “At 0.6 percent, this group is quite close to pre-crisis norms.”

Mortgage interest rates are trending down, as well. Click here to learn more.

Rates of problem mortgages are higher among homeowners with negative equity, according to Blecher.  Homeowners with a loan-to-value ratio of 100 percent to 110 percent are defaulting at a rate more than double the national average.  The rate is quadruple for borrowers for borrowers 50 percent or more underwater.

In other real estate market trends, home ownership rates have fallen to 1995 levels. Click here to learn more.

“Still, the overall equity trend has been a very positive one,” Blecher said. The share of underwater loans has fallen 41 percent from a year ago. In other positive real estate market trends overall delinquency rates fell to 6.59 percent, a 3.13 percent drop from February to March, LPS reports.

The “legacy impact” of foreclosures is driving the decrease in home ownership, which has fallen to an 18-year low, according to Lawrence Yun, chief economist, for the National Association of Realtors. “When a first-time homebuyer buys a distressed property, there is no net increase in the number of home owners, though a home sale has occurred,” Yun blogged today. “Currently, there are 1.6 million distressed homeowners still in the foreclosure process and nearly all will switch into being renters.”

The trend is likely to continue for the foreseeable future, according to Yun, who expects the home ownership rate to fall to 64.7 percent in the next few months.