Jackson Jambalaya

If links dont' work, see note at bottom of post.

The implosion of Realty Mortgage led me to do some research on what the default rates are for local mortgage lenders (I know, I'm such a geek.). FHA's Neighborhood Watch publishes basic default data for lenders on its website. The main benchmark to watch is the "compare ratio". If a lender has a ratio of 100%, its ratio of defaults is in line with national norms. If its 200%, then it is double the national norms. Data is also available for default rates in the last two years and how many payments were made for each loan before the first 90-day delinquency.

An examination of Realty Mortgage discloses a few interesting facts. It has a compare ratio of 111%. The level of default's for RM's loans were slightly above other mortgage lenders on a national scale and much higher than most mortage lenders in the Jackson-metro area. Compare Ratio Link 133 of the 2,972 FHA mortgages underwritten by Realty Mortgage were listed as being 90 days or more late at least once.

Clicking on the "total in default" number displays a screen where one can examine the defaults on Realty's mortgages by city and state. Mississippi had the largest number of defaults (defaulat is defined as 90-day delinquency) as it provided RM with nearly half of its defaults. Several facts are very interesting and give lie to the often-repeated claims in the media that the foreclosure crisis is because of subprime mortgages, adustable mortgages, no income loans, and predatory lending. In this case, the mortgages are issued only after the income and assets are FULLY documented. Unless programs such as Mississippi Home Corp's bond money for down payment assistance are used, down payment of 3% is required. Mortgage insurance is cheaper.

Unfortunately, these factors still show several common characteristics. Most borrowers had interest rates below 7%. The majority of the borrowers did not make payments for the first year before they went into default. The zip codes with the most defaults were 39212 (Jackson) and 39272 (Byram). Rest of default data

Examining the other local banks and mortgage lenders reveals some interesting facts:

Trustmark. Trustmark has a compare ratio of only 23%. Trustmark's mortgage default at a rate more than 75% below the national standard on FHA mortgages as only 7 of 692 mortgages were listed in default. List of Trustmark defaults
Regions. The compare ratio for Regions was slightly above Trustmark's at 38%. List of Defaults. Very few in Mississippi
Community Bank. Compare ratio of 50%. 2 out of 92 mortgages were listed as defaults. List of defaults
Bancorp South. Compare ratio of.................16%. Amazing. Nearly 2,000 mortgages were undritten and only eight defaulted. Someone has a good underwriting department. None were in the Jackson area. List of defaults
Mortgage Consultants. Compare ratio of 31%. Only 1 out of 151 FHA mortgages were listed as a default.
Bankplus. Compare ratio of 26% with only 3 of 151 FHA loans listed as being in default.
Advantage Mortgage. 81% compare ratio.
Homefirst Mortgage. 0% compare ratio. Nuff said.
The Mortgage Connection. 11% compare ratio. 1 out of 126 FHA mortgages in default.
First Mississippi Capital. 306% compare ratio (The Champ). 14 of 129 FHA mortgages were in default at some point.
Cimarron Mortgage. Compare ratio of 178%. However, this is skewed as Cimarron had only one mortgage listed as being in default out of 13 FHA mortgages.
Advanced Mortgage. The OTHER Champ: 0% compare ratio. No defaults.

Most local mortgage companies and banks are doing much better than the national averages in terms of FHA defaults. What is interesting is the rates were low, the income was documented, down payments were usually required, yet most of the borrowers defaulting couldn't even make it one to two years past closing before they went 90 days late at least once.

Note: If links do not work, use this pathway:
https://entp.hud.gov/sfnw/public/ > enter name of lender> select lender from list>