Mortgage Delinquencies Drop: Trend or Trough?

Some good news from Debt City, U.S.A.: The rate of serious delinquencies on conventional mortgages -- those that are at least 90 days behind -- fell to 4.82 percent in July, from 4.99 percent in June. Freddie Mac's delinquency rate dropped to 3.83 percent in August, from 3.89 percent in July. Fannie Mae's delinquency rate was higher than the 4.17 percent reported in July 2009. Mortgage modifications are considered delinquent until they are made permanent; the decline is likely the result of Fannie Mae's resumption of foreclosures after a period in which it kept mortgage mods in limbo. Perhaps the drop in delinquencies is not the good news it seems, but rather a somewhat inconsequential shift in federal policy.