RECESSION HASN'T SLOWED MORTGAGE PAYMENTS, LENDING

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, February 23, 1992                   TAG: 9202240238
SECTION: HOMES                    PAGE: E-6   EDITION: METRO 
SOURCE: MAG POFF BUSINESS WRITER
DATELINE:                                 LENGTH: Medium
RECESSION HASN'T SLOWED MORTGAGE PAYMENTS, LENDING
Despite the recession and rising unemployment, most people are still able to meet their monthly home mortgage payments.
Nor have tough economic conditions tightened the mortgage market. Home buyers attracted by declining interest rates and bargain home prices are finding loans as usual.
"I haven't see any problem, nothing out of the ordinary," said Anne Lee Stevens, president-elect of the Roanoke Valley Realtors Association.
She hasn't heard any report that banks and mortgage companies are applying more stringent borrowing qualification guidelines than in the past. "Things are just moving along," she said. Indeed, sales have shot up recently. Roanoke Valley real estate agents sold 245 homes last month, up 99 percent from the 123 houses that changed hands in January 1991.
Brenda McDaniel, spokeswoman for Dominion Bankshares Corp., in Roanoke, said its mortgage company had a home mortgage delinquency rate of only 2.34 percent last month.
She said the delinquency rate has ranged about 3.3 percent to 3.5 percent in the last six months after a dip to 2.88 percent last July. Those numbers are not considered a major problem, she said.
The figure is for mortgages whose payments are in arrears, not for foreclosures.
Marc Smith, president of Crestar Mortgage Co. in Richmond, said the delinquency rate has remained flat in the last year. "We don't see a significant trend," he said.
Smith said the current rate is 3.2 percent, the same as a year ago. That is up slightly from 2.3 percent in mid-1990, he said, which was the low point in the current economic cycle.
But the foreclosure rate is low, he said, because taking over a house is "not in our best interest." He said banks prefer to work with their customers to save the house and the loan.
Smith said the full impact of the recession may lie in the future. In the recessions of the early 1980s and the mid 1970s, Smith said, delinquencies peaked 8 to 12 months after recovery began.
He said he couldn't explain why that was true, but economically troubled families may pay the mortgage as long as they can. And, Smith said, creation of new jobs comes late in a recovery.
The mortgage banking business is good today, Smith said, because recessions bring lower interest rates. That pushes up home buying and mortgage volume.
At the turn of the year, Smith said, about 75 percent of the business at Crestar Mortgage involved refinancing of existing loans at lower rates. Since then, more than 50 percent of the mortgage business has been for home buying.

by Bhavesh Jinadra by CNB