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Mortgage Delinquencies Still On The Rise

Report finds 6.35% of home mortgages delinquent

June 5, 2008

When it comes to foreclosures, those numbers are also rising. The MBA report shows 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.

"While the foreclosure 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 loan types and certain states," said Jay Brinkmann, MBA's Vice President for Research and Economics.

"For example, while subprime ARMs represent 6 percent of the loans outstanding, they represented 39 percent of the foreclosures started during the first quarter. Prime ARMs represent 15 percent of the loans outstanding, but 23 percent of the foreclosures started."

Out of the approximately 516,000 foreclosures started during the first quarter, the bankers group says subprime ARM loans accounted for about 195,000 and prime ARM loans 117,000, but the increase in prime ARM foreclosures exceeded subprime ARM foreclosures with increases of 29,000 and 20,000 respectively over the previous quarter.

The seasonally adjusted total delinquency rate is the highest recorded in the MBA survey since 1979, and it's timing may bode ill for the market. 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.

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.

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

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