More than one-in-five subprime adjustable-rate mortgages were delinquent at the end of last year, while more than one-in-ten subprime ARMs were in foreclosure. Subprime activity helped push overall delinquency to the highest level in more than 20 years and foreclosures to the highest level ever.
Excluding loans in foreclosures, seasonally-adjusted residential delinquency ended the fourth quarter at 5.82 percent -- the highest level since 1985, the Mortgage Bankers Association reported today in its National Delinquency Survey. Late payments were 23 basis points higher than the previous quarter and 87 BPS above the level a year earlier.
On prime loans, seasonally-adjusted delinquency was up 12 BPS from the third quarter to 3.24 percent, while subprime delinquency jumped 1.00 percent to 17.31 percent, MBA said. FHA delinquency was up 13 BPS to 13.05 percent.
The states with the highest delinquency rates were Mississippi, with 11.07 percent; Michigan, at 8.97 percent; and Georgia with 8.37 percent, the data indicated.
MBA said its findings were derived from 46 million residential first mortgages, including 6 million subprime loans.
Loans in foreclosure ended the year at 2.04 percent -- the worst level in U.S. history, the trade group said. Foreclosures jumped from 1.69 percent at the end of the third quarter and 1.19 percent a year earlier.
Ohio had the highest foreclosure rate of any state, at 3.88 percent; followed by Indiana, at 3.53 percent; and Michigan, with a 3.38 percent rate, according to the report.
Foreclosures on prime loans rose 17 BPS to 0.96 percent, the survey indicated. Subprime foreclosures soared 176 BPS to 8.65 percent and FHA foreclosures were up 12 BPS to 2.34 percent.
MBA noted foreclosure starts were a seasonally-adjusted 0.83 percent on Dec. 31 -- also the highest level ever. Loans entering foreclosure were up 5 BPS from the previous quarter and up 29 BPS from a year earlier.
Based on total delinquency, subprime delinquency was highest in Mississippi, which had a total delinquency rate of 26.58 percent; followed by Michigan, at 24.77 percent; then West Virginia, with a 22.22 percent rate, MBA said. Missouri was next, with a 21.79 percent rate; and Tennessee was No. 5, at 21.67 percent.
Looking at just subprime ARMs -- which have been responsible for much of the current crisis, total delinquency ended the latest period at 21.70 percent on a national basis while loans in foreclosure were 13.43 percent, the trade group indicated. Mississippi had the worst overall subprime ARM delinquency rate, at 32.68 percent, while Ohio had the highest subprime ARM foreclosure rate, at 21.04 percent.