Magazine article Mortgage Banking

Delinquencies, Foreclosures Top Record during First Quarter

Magazine article Mortgage Banking

Delinquencies, Foreclosures Top Record during First Quarter

Article excerpt

The share of homeowners paying their mortgages late as well as the share of homeowners in the foreclosure process both saw a spike during the first quarter of 2008 compared with one year earlier, reaching a near-30-year high, according to the Mortgage Bankers Association's (MBA's) quarterly National Delinquency Survey (NDS).

MBA's NDS noted that the delinquency rate for mortgage loans on one-to-four unit residential properties stood at 6.35 percent of all loans outstanding in the first quarter of 2008-the most recent numbers available-- on a seasonally adjusted basis, up 53 basis points from the fourth quarter oi 2007 and up 151 basis points from one year ago.

The percentage of loans in the foreclosure process was 2.47 percent at the end of the first quarter--an increase of 43 basis points from the fourth quarter of 2007 and 119 basis points from one year ago. Meanwhile, the share of loans on which foreclosure actions were started during the quarter was 0.99 percent on a seasonally adjusted basis--r6 basis points higher than the previous quarter and up 41 basis points from one year ago.

The seasonally adjusted total delin-quency rate is the highest recorded in the MBA survey since 1979; however, the non-seasonaily adjusted delinquency rate is not. Delinquency rates normally peak at the end of the year and drop to their lowest point for the year at the end of the first quarter, explained Jay Brinkmann, MBA's vice president for research and economics, during a telephone conference call for reporters.

The non-seasonally adjusted rate was down 67 basis points from the fourth quarter but up 131 basis points from the first quarter of last year. The increase in the overall delinquency rate was driven by increases in the number of loans 60 and 90 or more days past due, primarily in California and Florida. The 30-day delinquency percentage is still below levels seen as recently as 2002.

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Once again this quarter, the rate of foreclosure starts and the and the percentage of loans in the process of foreclosure are the highest recorded since 1979, noted Brinkmann.

"While the fore-closure start rates were up for all types of mortgages, a reflection of the decline in home prices, the magnitude of the national increases is clearly driven by certain driven by certain loan types and certain states', said Brinkmann. …

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