2007 is not going to be a good year for mortgages. The percent of seriously delinquent after 12 months is 0.97% for mortgages issued in the first half of 2007, as opposed to 0.33% for those issued in 2006. Freddie Mac reported 1.38% at 18 months as compared to 0.38% for 2007 and 2006 respectively.

The defaults in 2006 aren’t really hitting the banks yet, and we’ve still had 7 bank failures….What happens when 2007 really hits?