Where are we, really?
Californians might be surprised. It's a little better than you might think. Let's listen to the Mortgage Bankers Association's Jay Brinkmann, one of the country's better-known trackers of real estate and loan markets.
"The principal question I get is, are things getting better or worse? Is this a good report or bad? Where are we headed?" he said during a media call Thursday.
"Like most things these days it's a combination of good news and not-so-bad news," the economist said. "There are areas of concern within the good news. And our bar for good news is set pretty low these days."
Even by economist standards this may be a record for vagueness. But Brinkmann's numbers ? widely watched in financial circles ? showed that nearly every terrible foreclosure indicator in California is still easing.
Second-quarter delinquency rates fell from early this year, although they're still higher than a year ago. Foreclosure starts and the percentage of houses somewhere in the foreclosure process are down from the first quarter ? and also lower than a year ago. Brinkmann said California had 20 percent of U.S. foreclosure starts last year. They've fallen since to 14.7 percent.
That's still high. But, for now, it shows a mega-state backing away from the cliff.
Nationally, the number of houses somewhere in the foreclosure process also fell for the first time since 2006.
Brinkmann was asked about "shadow inventory." What about supposedly 7 million U.S. houses where people are behind on payments or in the foreclosure process? It's been reported that all are foreclosure candidates, which will keep us in a death spiral.
Brinkmann sees the number as substantially lower, at 4.5 million. He said, "Some people are reaching for headlines. They count everything. You can assume some cure rate. We do."
By cure, he means fewer people going from 30 days late to 90 days late. He means more, not fewer, successful loan modifications, short sales, people getting back on their feet.
Yet "going forward in terms of delinquencies is going to be a question of jobs," he said. "It takes a paycheck to make a mortgage."
Brinkmann still worries that today's lousy job news might eventually dampen an improving delinquency and foreclosure picture. Unemployment, for example, has risen to almost 13 percent in El Dorado, Placer, Sacramento and Yolo counties.
Bottom line, there is still not an entirely clear answer about better or worse. Perhaps the good news is hearing a regarded industry voice saying ? again, for now ? that we "are making some headway."
The bar, indeed, is low for good news. But this is something to keep in mind when people and companies "are reaching for headlines," in Brinkmann's words, by forecasting a housing collapse.
