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Delinquency, Foreclosure Rates Soar

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Nearly 9 percent of U.S. residential mortgages were either delinquent or in foreclosure at the end of the first quarter. Florida, Indiana and Michigan were among the states with the worst rates. But the rate of late payments on loans insured by the Federal Housing Administration actually fell.

Seasonally adjusted delinquency of at least 30 days on loans secured by 1- to 4-unit properties, excluding loans in foreclosure, was 6.35 percent in the first quarter, the Mortgage Bankers Association reported today in its National Delinquency Survey. Late payments rose from 5.82 percent in the fourth quarter and 4.84 percent in the first quarter 2007.

The Washington, D.C.-based trade group said its survey covers about 45 million first-lien mortgages, including 5.5 million subprime loans.

On just prime loans, delinquency rose to 3.71 percent on March 31 from 3.24 percent on Dec. 31, MBA said. Subprime delinquency climbed to 18.79 percent from 17.31 percent, but FHA delinquency fell to 12.72 percent from 13.05 percent.

States with the highest delinquency were Michigan, at 7.84 percent; Georgia with a 7.36 percent rate; and Indiana, at 7.05 percent. Florida followed, at 7.03 percent; then Alabama, at 7.02 percent.

Serious delinquency, which includes loans past due at least 90 days and loans in foreclosure, was 4.03 percent at the end of the first quarter, rising from 3.62 percent three months earlier and 2.23 percent 12 months earlier, the survey said. Serious delinquency figures were not seasonally adjusted.

The rate of mortgages entering foreclosure in the latest period was 0.99 percent, climbing from 0.83 percent in the prior period and 0.58 percent 12 months earlier, MBA said.

“California saw a total of approximately 109,000 foreclosure starts and Florida 77,000,” MBA Vice President for Research and Economics Jay Brinkmann said in the report. “The next highest states were Texas, Michigan and Ohio with between 24,000 and 20,000 each.”

Loans in foreclosure represented 2.47 percent of outstanding loans on March 31, up from 2.04 percent on Dec. 31, 2007, and 1.28 percent on March 31, 2007.

The foreclosure rate for prime loans was 1.22 percent, up from 0.96 at the end of the fourth quarter. Subprime foreclosures rose to 10.74 percent from 8.65 percent, and FHA foreclosures rose to 2.40 percent from 2.34 percent.

“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,” MBA stated.

The worst foreclosure rate was in Florida, which had a 4.61 percent rate; then Nevada, at 4.12 percent. Ohio was No. 3, at 4.10 percent; followed by Indiana, with 3.72 percent; and Michigan, at 3.61 percent.

The share of mortgage loans either delinquent loans or in foreclosure was 8.82 percent at the end of the latest period, rising from 7.86 percent at the end of the fourth quarter and soaring from 6.12 percent at the end of March 2007.

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