Flippers and other speculators investing in single-family homes helped drive up prices in many hot housing markets during the boom, they’re now contributing heavily to mortgage delinquencies in several of those markets, according to a report released by the Mortgage Bankers Association (MBA).

• As of June 30, in Nevada, 32 % of all prime mortgages in default and 24 % of subprime defaults were on non-owner occupied properties.
• The numbers for Arizona were 26 % prime and 18 % subprime.
• In California, they were 21 % and 15 % respectively.
• The default rates in Florida for non-owner occupied homes were 25 % for prime loans and 14 % for subprime ones.
• In the rest of the nation, non-owners accounted for just 13 % of prime loan defaults and 11 % of subprime.

“When this over-supply became apparent and prices began to fall, many of these investors simply walked away from their mortgages.” Doug Duncan, the MBA’s chief economist, said in a statement.

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Delinquencies hit 5.12 % of all outstanding mortgages in the second quarter, up from 4.39 percent a year ago according to the Mortgage Bankers Association (MBA) quarterly survey. The loans actually entering foreclosure proceedings stood at 0.65 %, a rise from 0.58 % in the first three months - and the highest rate in the MBA’s 55-year history.

As stagnant home prices, more Americans are falling behind in their, auto-industry weakness and climbing interest rates have taken a toll on housing affordability. The survey revealed steady increases in all categories of delinquencies among mortgage borrowers, but problems in subprime adjustable rate loans drove much of the increase. Homes entering the foreclosure process in Arizona, California, Florida and Nevada drove the national increase - the national foreclosure rate would have otherwise declined.

Many investors simply do not have the same level of interest in retaining their properties than do owner-occupiers who have, historically, always strived to keep their properties.

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According to CNNMoney.com, the upcoming fourth quarter is the make-or-break period for the retail industry and the path leading to the crucial holiday season is peppered with land mines. As much as 50 % of merchants’ annual profits and sales are accounted for in two months: November and December. So far consumers continue to spend confidently, unmoved by the growing crises in the housing and credit markets.

Retail economists credit a still resilient jobs market and growth in real income for making Americans feel confident about their spending ability. But that confidence is waning according to one key barometer. The Conference Board on Tuesday reported a steep drop in consumer confidence in August, the biggest in nearly two years and possibly the first clear sign that consumer spending - which accounts for two-thirds of the nation’s economy - is on the brink of a contraction.

And that possible contraction in consumer spending along with housing, credit market turbulence, product recalls and declining store traffic threaten 2007’s holiday season.

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Asian stocks fell Thursday morning, battered by persistent jitters over U.S. housing loan problems and their possible damage to global financial markets.

The benchmark Nikkei 225 index lost 2.6 % on the Tokyo Stock Exchange in the morning session, and South Korea’s main benchmark fell more than 7 % in early trade after markets there were closed Wednesday for a national holiday.

Taiwan’s main stock index was down 4 % at midday; China’s main index in Shanghai was down 1.4 %.

Singapore’s Straits Times Index was down 4.12 %.

Hong Kong’s blue chip Hang Seng Index was down 4.2 % at midday.

Indonesia’s standard stock index fell as much as 5.6 % in morning trade.

The Philippine benchmark was down 6.1 %, falling below a symbolic 3,100 support level early and then crashing through 3000.

Australia’s benchmark S&P/ASX 200 index was down 3.1 %

The New Zealand benchmark NZX-50 was down 1.6 %. The index has lost more than 8 % in three weeks, including 4.5 % since Monday. 

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