Badly Overdue Mortgages, Foreclosures Stay at Record Highs

Foreclosure salesBorrowers seriously delinquent on their mortgages – those at least 90 days late – and those in foreclosure continued at historically high percentages in the first quarter of 2010, while shorter-term delinquencies showed a possible plateau – a potential bright spot in an otherwise troubling report by the Mortgage Bankers Association.
The combination of loans in foreclosure and those at least one payment past due on one-to-four-unit homes was 14.01 percent on a non-seasonally adjusted basis by March 31, 2010, a decline from 15.02 percent the previous quarter.  A year ago the rate was 12 percent.
Loans that are 90 days or more past due or in foreclosure represent a historically high 68 percent of all problem mortgages, according to the MBA’s National Delinquency Survey.
But there is an encouraging sign: the percentage of loans that saw the beginning phase of foreclosures was relatively flat at 1.23 percent quarter over quarter, and decreased from 1.37 percent a year ago.
“Overall, we see a continuation of the pattern of declines in short-term delinquency rates, at least on a non-seasonally adjusted basis, the continued historically high share of delinquencies that are 90 days or more past due, and a leveling off in the pace of foreclosures,” said Jay Brinkmann, MBA’s chief economist.
The short-term – 30 days overdue – delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally-adjusted rate of 10.06 percent of all loans outstanding in the first quarter of 2010, the MBA said.
That’s an increase from 9.47 percent in the fourth quarter of 2009, and up from 9.12 percent from one year ago.
But the non-seasonally adjusted delinquency rate decreased 106 basis points from 10.44 percent in the fourth quarter of 2009 to 9.38 percent this quarter.
The MBA said the adjusted data – which showed an increase – should be cautiously read because of difficulty measuring what represents a fundamental improvement in mortgage delinquencies with current market conditions, rather than seasonal adjustments.
Delinquency rates normally increase in the fourth quarter and fall in the following first quarter.
The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 9.54 percent, a decrease of 13 basis points from 9.67 percent from the previous quarter, but an increase of 230 basis points from the first quarter of last year when the rate stood at 7.24 percent.
The percentage of loans in the foreclosure process at the end of the first quarter was 4.63 percent, a slight increase from 4.58 percent from the fourth quarter of 2009 – but up from 3.85 percent a year ago. This represents another record high.

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