James Pethokoukis

It was a pretty upbeat Ben Bernanke that spoke over the weekend at the Fed conference. But a few cautionary statistics from Ed Yardeni:

(1) Commercial bank loans are down $293.1bn ytd through August 12.

(2) Commercial banks are still failing. Indeed, 77 lenders have been closed ytd, compared with 25 in all of 2008.

(3) The delinquency rate for mortgage loans on 1-to-4-unit residential properties rose to a seasonally adjusted rate of 9.24% of all loans outstanding as of the end of Q2-2009. The percentage of loans in the foreclosure process at the end of Q2 was 4.30%.

(4) The combined percentage of loans in foreclosure and at least one payment past due was 13.16% on a non-seasonally adjusted basis, the highest ever recorded in the delinquency survey conducted by the Mortgage Bankers Association.

(5) There was a major drop in foreclosures on subprime ARM loans during Q2, suggesting that the government’s mortgage mitigation programs are working. However, they are aimed mostly at distressed borrowers with resets rather than prime borrowers losing their jobs. Indeed, there were increases in the foreclosure rates on the other types of loans, with prime fixed-rate loans having the biggest increase. As a sign that mortgage performance is once again being driven by unemployment, prime fixed-rate loans now account for one in three foreclosure starts.