Home Loans Improving Good News for Big Banks (BAC, FRE, FNM)
The number of borrowers falling behind on their mortgage payments dropped sharply at the end of last year, a sign the foreclosure crisis is beginning to ebb. Good news for Bank of American (NYSE:BAC), Fannie Mae (NYSE:FNM), and Freddie Mac (NYSE:FRE).
|Ticker||Company||Price||Change▲▼||Chg %▲▼||Mkt Cap|
|BAC||Bank of America Corp.||15.98||+0.10||0.63%||138.23B|
Shares of Freddie, Fannie, and BofA are unchanged on the news of home loans improving but its a great sign for a recovering economy. The Mortgage Bankers Association said Friday that the percentage of borrowers who missed just one payment on their home loans fell to 3.6 percent in the October to December quarter, down from 3.8 percent in the third quarter. The decline was even more surprising because delinquencies usually rise at that time of year due to higher heating bills and holiday spending.
The new trend in late payments is significant because it means the number of people going into foreclosure will continue to decline this year. And that is important for all homeowners in areas where cheaply priced foreclosures are bringing down neighboring values.
In high-foreclosure cities like Las Vegas, Phoenix and Miami, for example, homes have lost roughly half their values from their peaks. But Friday's report showed Nevada, Arizona and Florida had some of the biggest declines in new delinquencies.