oreclosures
According to the Mortgage Banker's Association today, "The delinquency rate for mortgage loans on one-to-four-unit residential properties stood at 6.99 percent of all loans outstanding at the end of the third quarter of 2008, up 58 basis points from the second quarter of 2008, and up 140 basis points from one year ago on a seasonally adjusted basis, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey.
Top Line Results
The delinquency rate includes loans that are at least one payment past due but does not include loans somewhere in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the third quarter was 2.97 percent, an increase of 22 basis points from the second quarter of 2008 and 128 basis points from one year ago. The percentage of loans in the process of foreclosure set a new record this quarter.
The percentage of loans on which foreclosure actions were started during the third quarter was 1.07 percent, down one basis point from last quarter and up 29 basis points from one year ago on a non-seasonally adjusted basis.
The seasonally adjusted total delinquency rate continues to be the highest recorded in the MBA survey. The increase in the overall delinquency rate was driven by increases in the number of loans 90 or more days past due, primarily in California and Florida. The 30 day delinquency percentage remains below levels seen as recently as 2002.
The foreclosure starts rate differed greatly by loan type. For prime loans, foreclosure starts on fixed rate loans were 0.34 percent, unchanged from last quarter, while prime ARM foreclosure starts fell five basis points to 1.77 percent. For subprime loans, fixed rate foreclosure starts increased 16 basis points to 2.23 percent and subprime ARM foreclosure starts decreased 16 basis points to 6.47 percent. FHA foreclosure starts were unchanged at 0.95 percent and VA foreclosure starts increased two basis points to 0.59 percent, all on a non-seasonally adjusted basis.
Nine states had rates of foreclosure starts that were above the national average: Nevada, Florida, Arizona, California, Michigan, Rhode Island, Illinois, Indiana, and Ohio. The remaining 41 states plus the District of Columbia were below the national average.
Job Losses to Drive Mortgage Delinquencies
Jay Brinkmann, MBA’s Chief Economist and Senior Vice President for Research and Economics said, “An initial look at the number of foreclosure starts would seem to indicate at least a leveling off of foreclosures. These numbers, however, are being influenced by several factors including various moratoria on foreclosure filings and by mortgage companies holding loans in the 90+ day bucket during the modification and workout process. Evidence of this can be seen in the large increase in loans 90 days or more past due but not yet in foreclosure. This rate jumped by 45 basis points, the highest increase in this category ever recorded in the MBA survey and far above the average 4 basis point jump we would expect to see. While 20 states showed declines in the rate of foreclosure starts between the second and third quarters, every state showed an increase in the 90 days or more delinquent category with the exception of Alaska and all of the increases were greater than what we would expect due to normal seasonal factors.”
“As for what is driving the national numbers, it is still a case of product and location. Prime and subprime ARMs continue to have the highest share of foreclosures and California and Florida have about 54 percent and 41 percent of the prime and subprime ARM foreclosure starts respectively. Until those two markets turn around, they will continue to drive the national numbers,” continued Brinkmann.
“While much of the mortgage problem in some states continues to be overbuilding, poor underwriting and incorrect credit pricing, fundamental economic factors are becoming more important. The 30-day delinquency rate is still lower than it was in the 2001 recession, but job losses are mounting. We have not gone into past recessions with the housing market as weak as it is now so it is likely that a much higher percentage of delinquencies caused by job losses will go to foreclosure than we have seen in the past.
“Until recently, it was job and population losses that were the problems in states like Michigan and Ohio, whereas the problems in California and Florida were a combination of too many houses, speculation and weak underwriting. Economic fundamentals are now deteriorating in California and Florida. Over the past year, Florida led the nation in job losses at 156,200, with California losing 101,300, as compared with Michigan job losses at 71,200 and Ohio at 17,300.
“In the last quarter we saw about 575,000 foreclosure actions started, compared with an estimated 580,000 in the second quarter and 535,000 in the first quarter. At this rate we are looking at finishing 2008 at about 2.2 million foreclosure actions started. Absent a recession, the 2009 number would likely have fallen by several hundred thousand but the effects of job losses and general economic deterioration make the 2009 outlook worse, particularly if mortgage problems become more widespread,” Brinkmann said.
Change from last quarter (second quarter of 2008)
The seasonally adjusted delinquency rate increased 41 basis points to 4.34 percent for prime loans, increased 136 basis points to 20.03 percent for subprime loans, increased 29 basis points to 12.92 percent for FHA loans, and increased 46 basis points to 7.28 percent for VA loans.
The percent of loans in the foreclosure process increased 16 basis points to 1.58 percent for prime loans, and increased 74 basis points for subprime loans to 12.55 percent. FHA loans saw an eight basis point increase in the foreclosure inventory rate to 2.32 percent, while the foreclosure inventory rate for VA loans increased 13 basis points to 1.46 percent.
The non-seasonally adjusted foreclosure starts rate remained unchanged for prime loans at 0.61 percent and decreased three basis points for subprime loans to 4.23 percent. The rate was unchanged for FHA loans at 0.95 percent and increased two basis points for VA loans to 0.59 percent.
The seriously delinquent rate, the non-seasonally adjusted percentage of loans that are 90 days or more delinquent, or in the process of foreclosure, was up from both last quarter and from last year. This measure is designed to account for inter-company differences on when a loan enters the foreclosure process.
Compared with last quarter, the seriously delinquent rate increased for all loan types. The rate increased 52 basis points for prime loans to 2.87 percent, increased 171 basis points for subprime loans to 19.56 percent, increased 62 basis points for FHA loans to 6.05 percent, and increased 45 basis points for VA loans percent to 3.45 percent.
Change from last year (third quarter of 2007)
On a year-over-year basis, the seasonally adjusted delinquency rate increased for all loan types, except FHA loans. The delinquency rate increased 122 basis points for prime loans, increased 372 basis points for subprime loans, and increased 70 basis points for VA loans. The seasonally adjusted delinquency rate was unchanged for FHA loans on a year over year basis.
The percent of loans in the foreclosure process increased 79 basis points for prime loans and 566 basis points for subprime loans. The rate increased 10 basis points for FHA loans and 43 basis points for VA loans.
The non-seasonally adjusted foreclosure starts rate increased 29 basis points overall, 25 basis points for prime loans, 105 basis points for subprime loans, one basis point for FHA loans, and 20 basis points for VA loans.
The seriously delinquent rate was 156 basis points higher for prime loans and 818 basis points higher for subprime loans. The rate also increased 51 basis points for FHA loans and 89 basis points for VA loans."
In an effort to replicate academic success across the state, Commissioner of Higher Education Sally Clausen and Louisiana Superintendent of Schools Paul G. Pastorek commissioned a study of the Department of Education’s 21 high performing, high poverty schools. In February of 2008, the Department of Education recognized these schools as having academic success with School Performance Score of 80 or above in the school year 2007-2008, more than 50% minority students, and participation in the free and reduced lunch program at 82% or above.
“This study offers Louisiana educators powerful information that I hope will tear down the stereotypes about the potential of students who live in poverty,” said Dr. Clausen. “These school leaders have shown that all students can learn to much higher standards when provided the highest quality teachers who are certified in their respective subject matter content and school leaders who are also curriculum leaders. We thank these schools and their families for participating in this research which has the potential to transform expectations of poor and minority students."
“These schools are succeeding in the face of what some have called impossible odds,” said State Superintendent of Education Paul Pastorek. “Students living in poverty lack access to the same kinds of learning resources and life experiences enjoyed by students living at higher socioeconomic levels, and in many cases these students arrive less prepared than their peers. But these school leaders and teachers are making sure these children get the support they need to succeed. Their determination and abilities as educators are not only inspiring, but through their work they are providing us with successful models and practices that we can replicate across the state.”
Using the nationally respected Vanderbilt Assessment of Leadership in Education (VAL-Ed), the study found common leadership practices which appear to have a substantial impact on improving student learning. Six core components were present in all 21 schools:
High Standards for Student Learning – Individual, team and school goals for rigorous student academic and social learning.
Rigorous Curriculum – Ambitious academic content provided to all students in core academic subjects.
Leadership Strategies at Successful Schools Page 2
Quality Instruction – Effective instructional practices that maximize student academic and social learning.
Culture of Learning and Professional Behavior – Integrated communities of professional practice in the service of students’ academic and social learning. A healthy school environment where learning is the central focus.
Connections to External Communities – Linkages to family and/or other people and institutions in the community that advance academic and social learning.
Performance Accountability – Leadership holds itself and others responsible for realizing high standards of performance for student academic and social learning. Individual and collective responsibility among the professional staff and students.
The author of the study, Dr. Sharon Southall, says each of these principals have focused on "the development of quality instruction and a culture of learning inside their schools. They do not allow any obstacle to get in the way of student learning. For them failure was never a thought or an option."
The principals utilized similar processes including strong planning, support of students and staff, advocacy for the diverse needs of students and data driven decision making.
Several concrete examples of this leadership style used in the schools identified as high performing included changing the lunch schedule to allow an extended time for a reading block for students; providing transportation for parents to attend school meetings and making home visits to pick up students who did not show up for important tests.
The general consensus of principals in the study is that it takes three years to turn around a failing school. In the first year, the principal must concentrate on establishing a highly structured environment as well as a strong rapport with students. In the second year, the principal began building trust with teachers and instituted strong collaborative groups and in the third year, the principal committed to an evaluation on the progress made in order to discover the refinements needed to ensure that student achievement continued to improve.
Key recommendations from the study include:
<!--[if !supportLists]-->·<!--[endif]-->Create an advisory team of high performing, high poverty principals to help administrators of educational leadership preparation programs.
<!--[if !supportLists]-->·<!--[endif]-->Extend the instructional day and increase human capital at schools that serve high numbers of students who live in poverty.
<!--[if !supportLists]-->·<!--[endif]-->Require a full year of internship for Educational leadership programs and place prospective principals with an expert leader.
<!--[if !supportLists]-->·<!--[endif]-->Provide principals and faculty diversity training for working with Hispanic students and their families.
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The study consisted of two survey instruments, onsite interviews with the principals and a statistical analysis of the findings including specific teacher, principal and school factors.
Principals of these schools were honored at a reception at the Governor’s Mansion and appeared at today’s joint Board of Regents and Board of Elementary and Secondary Education meeting. Five of the top-rated principals have been selected to participate in a multi-case study that will delve deeper into their leadership styles as well as the processes they use. The purpose of the study is to identify specific ways educators can guide students from low socio-economic families to become academically successful. The list of High Performing, High Poverty schools is below.
Employees of the Federal Emergency Management Agency’s (FEMA) Louisiana Transitional Recovery Office (LATRO) gave back to their communities by contributing nearly $56,000 during the 2008 Combined Federal Campaign (CFC).
CFC is the federal counterpart to the United Way in coordinating fundraising efforts among federal donors. It offers employees an opportunity to make charitable donations to national, international and local organizations through payroll deduction or a one-time contribution.
“I am tremendously proud of the generosity of LATRO staff. Through their liberal contributions to the CFC, our employees have once again demonstrated their personal commitment to this recovery,” said Jim Stark, LATRO director. “The level of contributions is especially gratifying considering that much of it came from employees who, like the public we serve, are still dealing with the effects of hurricanes Gustav and Ike.”
The theme for this year’s campaign was “Cooking for Community.” CFC contributions are particularly important to Louisiana’s communities because, although there have been great strides toward recovery, there continues to be difficult challenges. Through their charitable contributions to nonprofit organizations, LATRO employees will have a substantial impact on the communities in which they live.
“The real heroes of this effort are the nearly 40 employees who stepped up and acted as the key workers, explaining the program, distributing forms and encouraging participation in CFC. They hosted multiple events at the office level to promote CFC and did an outstanding job,” said Mike Larkin, CFC coordinator for the LATRO office.
CFC is the only authorized solicitation of federal employees in their workplaces on behalf of approved charitable organizations. Federal employees continue to make the CFC the largest and most successful workplace philanthropic fundraiser in the world.
New Orleans Medical Convention
Nearly 2,700 leading researchers and scientists in the area of infectious and emerging disease are expected to attend the 57th Annual Meeting of the American Society of Tropical Medicine and Hygiene to discuss the prevention and treatment of global health threats. Topics and speakers scheduled for the New Orleans meeting include:
Meeting Topics:
The financial burden of global world health – can prevention and early treatment of disease in other countries ultimately save the U.S. money?
Advances in creating new repellents for mosquito-transmitted diseases, such as West Nile and Dengue Fever
Progress made in the pursuit to eradicate malaria
Updates on infectious disease vaccine developments
Immigrant and refugee health, including immunizations and women’s health issues
What to know about infectious diseases when traveling outside the U.S.
This year’s meeting will include speakers from around the world with organizations at the forefront of infectious disease health and prevention including PATH, The Carter Foundation, The Bill & Melinda Gates Foundation, WHO, NIH and CDC.
Two key lectures to be delivered during the opening days of the meeting include:
December 7th: "The Genius of Boldness: Thinking Big in Global Health" presented by Sir Richard Feachem, former executive director for the United Nations Global Fund.
December 8th: "The Hunt for the Reservoir Hosts of Marburg and Ebola Viruses" presented by Robert Swanepoel, National Institute for Communicable Diseases
GNOF
The Greater New Orleans Foundation (GNOF) announced today that it has awarded more than $105,000 to four philanthropic organizations through the Gert Town Community Fund. The grants were selected by the Gert Town Grants Advisory Committee. The purpose of the fund is to enhance the quality of life for residents of the Gert Town neighborhood in New Orleans. Using a competitive application process, GNOF chose to divide the fund among four organizations that serve the Gert Town community.
Armstrong Family Services, an organization dedicated to assisting homeless families with children, received a $5,000 grant for its Transitional Housing Program. The program provides families facing eviction, either due to a lack of financial support or as the result of a natural disaster, with up to three months of rental assistance. In order to receive assistance, clients must volunteer eight hours with the organization and meet with case managers to learn about budgeting.
The Audubon Nature Institute obtained a $33,000 grant to provide scholarships for Gert Town residents to its Zoo Camp. The scholarships will go to children between the ages of four and 10. In its second year, the program serves as an opportunity for enhanced scientific learning in a fun and safe environment for children.
The Gert Town Community Development Center (GTDC) will use a $34,917 grant for tutorial and enrichment programs and quarterly community clean up initiatives. GTCDC is dedicated to improving the social, economic, and physical environment of the Gert Town community. Its priorities include advocacy and leadership development, crime, education, environment, housing, infrastructure development, and recreational alternatives for youth and senior citizens.
The final grant went to No.1 Zion Outreach Ministries for a neighborhood beautification project. This $33,000 grant will support the removal of debris from vacant lots, streets, and sidewalks. The organization’s mission is to provide, promote and support positive opportunities for youth and seniors in the community.
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Founded in 1983, the Greater New Orleans Foundation (GNOF) provides a permanent and growing source of funding to hundreds of nonprofit agencies in the metropolitan New Orleans area. GNOF manages over 700 charitable funds and endowments with total assets of more than $192 million. Through initiatives designed to improve the quality of civic life, GNOF is leading philanthropic efforts with special emphasis on education, housing, and workforce training.
For more information on the Greater New Orleans Foundation, visit www.gnof.org.
