The share of homeowners paying their mortgages late rose, while the share of homeowners in the foreclosure process hit record levels during the fourth quarter of 2007, driven primarily by housing woes in California and Florida, 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 5.82 percent of all loans outstanding in the fourth quarter of 2007--the most recent numbers available--on a seasonally adjusted (SA) basis, up 23 basis points from the third quarter and up 87 basis points from one year ago.
The percentage of loans in the foreclosure process was 2.04 percent of all loans outstanding at the end of the fourth quarter, an increase of 35 basis points from the third quarter of 2007 and 85 basis points from one year ago.
Furthermore, the rate of loans entering the foreclosure process was 0.83 percent on a seasonally adjusted basis--5 basis points higher than the third quarter and up 29 basis points from one year ago, said MBA.
The total delinquency rate is the highest in the MBA survey since 1985, 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.
"Declining home prices are clearly the driving factor behind foreclosures, but the reasons and magnitude of the declines differ from state to state," explained Duncan.
The problem, in a word, said Duncan, is "Califlorida"--as both California and Florida represent a disproportionate share of the foreclosure starts in the nation. The two states accounted for 21 percent of all loans outstanding, but accounted for 30 percent of foreclosure starts in the country during the fourth quarter, he noted.
Furthermore, California and Florida accounted for 39 percent of all prime adjustable-rate mortgages outstanding, but 47 percent of prime ARM foreclosure starts. Similarly, they represented 29 percent of all subprime ARMs, but 36 percent of subprime ARM foreclosure starts.
"The rate of foreclosure starts in Florida more than tripled between the fourth quarter of 2006 and the fourth quarter of 2007, while the rate in California more than doubled," said Duncan.
While Michigan, Ohio and Indiana continue to have the highest percentages of loans in foreclosure, and are among the states with the highest rates of new foreclosures, those states...