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MBA: Delinquencies and Foreclosures Highest Since 1979


Mortgage delinquencies and foreclosure starts rose to record highs during the first quarter, according to the Mortgage Bankers Association’s National Delinquency Survey released today.

The seasonally adjusted delinquency rate (30+ days late) for all home loans on 1-4 unit properties climbed 53 basis points from the fourth quarter to 6.35 percent, the highest level recorded since 1979.

Compared to a year ago, the delinquency rate was a whopping 151 basis points higher, when it stood at just 4.84 percent.

The MBA blamed the rise on troubled loans 60 and 90 or more days overdue in California and Florida, noting that 30 day delinquencies are still below levels seen as recently as 2002.

However, Mississippi had the highest delinquency rate at 9.41 percent, followed by Michigan at 7.84 percent and Georgia at 7.36 percent.

More troubling was the fact that 2.47 percent of all loans were in the foreclosure process during the first quarter, an increase of 43 basis points from the fourth quarter and 119 basis points from the same period a year earlier.

Foreclosure starts occurred on 0.99 percent of all loans during the quarter on a seasonally adjusted basis, up 16 basis points from the fourth quarter and 41 basis points from a year ago.

Both the rate of foreclosure starts and the percent of loans in the foreclosure process were the highest recorded by the MBA since 1979.

MBA Vice President for Research and Economics Jay Brinkmann said foreclosure starts were up for all loan types, a reflection of falling home prices, but noted that the rate of foreclosure varied noticeably by product.

For example, foreclosure starts on prime fixed mortgages increased just seven basis points to 0.29 percent from the fourth quarter, while prime ARM foreclosure starts jumped 49 basis points to 1.55 percent.

Subprime fixed foreclosure starts climbed 28 basis points to 1.80 percent, while subprime ARM foreclosure starts surged 106 basis points to 6.35 percent.

Interestingly, FHA loans actually saw foreclosure starts decrease by four basis points during the quarter to a rate of 0.87 percent, while VA loan foreclosure starts increased by 11 basis pints to 0.39 percent.

California reported roughly 109,000 foreclosure starts during the quarter, followed by 77,000 in Florida and 24,000 in Texas.

And just four states, including California, Florida, Arizona, and Nevada, accounted for 62 percent of the foreclosure starts on prime ARM loans and 49 percent of all subprime ARM foreclosure starts during the quarter.

(photo: coccu)

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