Core Insights - The article discusses the shifting of mortgage risks from banks to taxpayers and investors, highlighting the current state of mortgage balances and the implications for the housing market [1][16]. Mortgage Balances - Mortgage balances increased by $137 billion (+1.1%) in Q3 from Q2 and by $482 billion (+3.8%) year-over-year, reaching a total of $13.1 trillion [1]. - The growth in mortgage balances is influenced by several factors, including the financing of newly constructed homes and the cash-out portion of refinanced mortgages [2]. Home Equity Lines of Credit (HELOCs) - HELOC balances rose by 2.7% quarter-to-quarter and by 9.0% year-over-year, totaling $422 billion, with a 33% increase since the low point in Q1 2021 [5][6]. - Despite the increase, HELOC balances remain relatively low, with many lines of credit unused [6]. - Risks associated with HELOCs include the potential for foreclosure if homeowners default on the second lien while keeping the first-lien mortgage current [8][9]. Housing Debt Metrics - The housing-debt-to-disposable income ratio in Q3 increased to 58.6%, slightly above the record low in Q2 [14]. - The burden of housing debt is evaluated using the debt-to-income ratio, which includes both mortgage and HELOC debt [11][12]. Risk Distribution - Banks and credit unions are responsible for $2.7 trillion in mortgages, accounting for only 19.7% of the total mortgage and HELOC debt [16]. - The government is liable for $9.1 trillion of single-family mortgages that are securitized into mortgage-backed securities (MBS) [17]. - Investors hold $1.7 trillion of residential mortgages that are not government-backed, carrying the credit risk for these loans [18]. Delinquency and Foreclosure Rates - Serious delinquency rates for mortgages and HELOCs remain low at 0.8% [19]. - Foreclosures in Q3 rose to 54,760, significantly below the pre-crisis levels [23].

Here's how to get a mortgage and get the best possible interest rate when you do. What is the process for getting a mortgage? Getting a mortgage can seem hard, especially if you’re a first-time home buyer. The key to making the process go smoothly is preparation. Here’s the step-by-step process you can expect when you get a mortgage: Assess your finances. The state of your finances — how much debt you have, your income and other factors — will help you figure out how much house you can afford. Improve ...