Delinquent mortgages not expected to turn into La. foreclosure wave

While Louisiana’s delinquent loan rate went up at the end of last year, the state won’t become a “foreclosure capital” like Florida, Nevada or California, says Kelley Pace, director of the LSU Real Estate Research Institute. According to the Mortgage Bankers Association’s fourth-quarter survey, loans 90 days or more past due in the state jumped to 3.42% in the fourth quarter, compared to the 3% national average, but Pace says that doesn’t point to a drastic rise in foreclosures. “We’re feeling the recession with low oil prices, but our mix of loans is helping us out because we didn’t participate as much in these exotic loans,” Pace says. “And since our house prices and employment are holding up, there’s no reason to worry excessively about these foreclosure problems. We’re basically a hinterland kind of state. We didn’t get much of the increase, so we’re not getting much of the decrease.” The state’s lower risk loan numbers have worsened some, but there isn’t a problem in fixed-rate prime loans or subprime adjustable-rate mortgages that contributed to housing market crashes in high-foreclosure states. In Louisiana, subprime ARMs in foreclosure reached 27.58% compared to the national 33.78% average. Florida had the highest rate of these loans at 47.86%. Louisiana’s prime fixed-rate loans that went into foreclosure last quarter was 0.25% compared to the national 0.41% average. Also, the state’s subprime fixed-rate loans that are seriously delinquent was 13.05%, just below the national 13.65% average.—Anna Thibodeaux