Here in DC, the housing market seems to be seriously heating up again. If houses sat on shelves, they'd be flying off of them--in the "transitional" neighborhoods that I keep my eye on, an easy majority of the new listings for homes under $500,000 last fewer than ten days.
It's hard to square this with the new report from the Mortgage Bankers Association, which indicates that fully one in seven mortgages in the United States is now delinquent. That's almost 15% of all mortgages, for those who flunked fraction.
It's now conventional wisdom that the causes of foreclosure have shifted dramatically over the last twelve months. The early foreclosures were usually due to some form of bad faith on the part of the borrower (or their lying, thieving mortgage broker): either they lied on their documents, and simply didn't have the kind of income they'd need to support their house; or they were investors who were speculating on the house, not planning to live in it, and they stopped paying the mortgage as soon as it became clear that they were simply throwing good money after bad. In other words, it was fundamentally a problem of excessive home values which have now fallen. Mortgage modifications were aimed at easing that problem.