Borrowers Delinquent or in Foreclosure at New High of 15%

Mortgage delinquenciesThe percentage of mortgage loans in the foreclosure process, combined with those at least one payment past due, set a record high of 15 percent, according to the Mortgage Bankers Association report for fourth quarter 2009.
Although the MBA stressed that the fourth quarter registered a slight dip in mortgage delinquencies, a surprising trend reversal for end-of-the-year borrowers facing holiday bills and higher heating costs.
However, the number of already delinquent borrowers getting closer to foreclosure represents a troubling trend.  A new high was also set in the number of loans 90 days or more past due, the MBA reported. And they now account for half of all delinquencies, the highest share in the organization’s history.
Loans in the foreclosure process by the end of last year was at 4.58 percent, an increase of 11 basis points from the third quarter of 2009,  and 128 basis points from one year ago, the MBA said.
The combined percentage of those loans and mortgages at least one payment past due was 15.02 percent on a non-seasonally adjusted basis, the highest recorded in the MBA delinquency survey.
In the MBA’s report out today, the organization said there were optimistic signs based on the fourth quarter delinquency rate – minus the loans in foreclosure.
The delinquency rate for mortgage loans on one-to-four-unit residential properties fell to a seasonally-adjusted rate of 9.47 percent as of the end of the fourth quarter of 2009, down 17 basis points from the third quarter of 2009.
Despite other reports that point to a potential new burst of foreclosures in coming months, the MBA suggested that the crisis may have peaked. The mortgage bankers’ group was encouraged particularly because the fourth quarter usually registers a jump in delinquencies.
“The continued and sizable drop in the 30-day delinquency rate is a concrete sign that the end may be in sight.  We normally see a large spike in short-term mortgage delinquencies at the end of the year due to heating bills, Christmas expenditures and other seasonal factors,” said Jay Brinkmann, MBA’s chief economist.

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