3Q delinquencies up, foreclosures top record.

Position:Briefing Book

The share of homeowners paying their mortgages late, as well as the share of homeowners in the foreclosure process, saw a significant increase during the third quarter of 2007 compared with both the previous quarter and the same time a year earlier, according to the Mortgage Bankers Association.

MBA's quarterly National Delinquency Survey (NDS) noted that the delinquency rate for mortgage loans on one-to-four-unit residential properties stood at 5.59 percent of all loans outstanding in the third quarter of 2007--the most recent numbers available--on a seasonally adjusted (SA) basis, up 47 basis points from the second quarter and up 92 basis points from one year ago.

The percentage of loans in the foreclosure process was 1.69 percent of all loans outstanding at the end of the third quarter, an increase of 29 basis points from the second quarter of 2007 and 64 basis points from one year ago.

Meanwhile, the share of loans entering the foreclosure process was 0.78 percent on a seasonally adjusted basis--13 basis points higher than the previous quarter and up 32 basis points from one year ago, according to MBA.

The total delinquency rate is the highest recorded in the MBA survey since 1986, while the rate of foreclosure starts and the percentage of loans in the process of foreclosure are at the highest levels ever, according to MBA Chief Economist Doug Duncan.

"This is the first quarter [that] registers the full combined effects of the seizure of the nonconforming securitization market, broad-based home price declines, continued weakness in some regional economies and rate adjustments on monthly payments," said Duncan. "The predictable results are increased delinquency and foreclosure."

The NDS noted that the increase in foreclosure starts was due to increases for all loan types.


Prime fixed-rate mortgage (FRM) foreclosure starts in the third quarter increased 4 basis points to 0.22 percent from the previous quarter; prime adjustable-rate mortgage (ARM) foreclosure starts increased 40 basis points to 1.02 percent; subprime FRM foreclosure starts increased 3 basis points to 1.38 percent; subprime ARM foreclosure starts increased 88 basis points to 4.72 percent; and FHA foreclosure starts increased 16 basis points to 0.95 percent, said MBA.

Since the third quarter of 2006, the foreclosure start rates for prime ARMs increased from 0.30 percent to 1.02 percent, and the rate for subprime ARMs increased from 2.19 percent to 4.72...

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