The delinquency rate for mortgages on one-to-four unit residential properties climbed to 5.82 percent of all outstanding loans in the fourth quarter on a seasonally adjusted basis, up 0.87 percent from the same period a year ago and 35 basis points from the third quarter, the Mortgage Bankers Association said today.
The MBA’s National Delinquency Survey also found that 2.04 percent of outstanding loans were in the foreclosure process, up 0.85 percent from a year ago and 0.35 percent from the third quarter.
That marked an all-time high, while the total delinquency rate reached its highest point since 1985.
The survey revealed that the mortgage crisis is all encompassing, and not just a subprime issue, but rather an adjustable-rate mortgage crisis.
Since the fourth quarter of 2006, foreclosure starts on prime ARMS increased to 1.06 percent from 0.41 percent, while foreclosures tied to subprime ARMS rose to 5.29 percent from 2.70 percent.
Conversely, foreclosure starts tied to prime fixed mortgages rose just six basis points to 0.22 percent over the last year, while subprime fixed loans experienced a foreclosure start rate of just 1.52 percent, up from 1.09 percent a year ago.
The MBA also found that 42 percent of foreclosures started during the fourth quarter were tied to subprime ARMs, despite the fact that these loans only account for seven percent of all loans outstanding.
Prime ARMs represented 15 percent of the loans outstanding in the fourth quarter, but accounted for just 20 percent of the foreclosures started.
Much of the foreclosure activity was in hotbeds like California and Florida, two states that held 21 percent of all loans outstanding, but accounted for 30 percent of all foreclosure starts in the U.S.
The rate of foreclosure starts in Florida more than tripled over the last year, while more than doubling in California.
“Declining home prices are clearly the driving factor behind foreclosures, but the reasons and magnitude of the declines differ from state to state,” said Doug Duncan, MBA’s Chief Economist and Senior Vice President of Research and Business Development.
“In states like Ohio and Michigan, declines in the demand for homes due to job losses and out-migration have left those looking to sell the homes with fewer potential buyers, particularly with the much tighter credit restrictions borrowers now face. In states like California, Florida, Nevada and Arizona, overbuilding of new homes created a surplus that will take some time to work through.
During the fourth quarter, the seriously delinquent rate (90 days or more past due) increased for all loan types from the third quarter.
The rate increased 36 basis points for prime loans (from 1.31 percent to 1.67 percent), 306 basis points for subprime loans (from 11.38 to 14.44 percent), 46 basis points for FHA loans (from 5.54 percent to 6 percent) and 27 basis points for VA loans (from 2.56 to 2.83 percent).
Read the entire mind numbing report here.
(photo: robyngallagher)