By MICHAEL R. CRITTENDEN
December 6, 2007 Wall Street Journal
WASHINGTON -- The number of mortgage loans at least 30 days past due reached its highest point since 1986 during the third quarter as foreclosure starts increased across all loan types, according to a Mortgage Bankers Association survey released Thursday.
The quarterly survey found the delinquency rate for mortgage loans on one-to-four unit residential properties was 5.59% during the third quarter on a seasonally adjusted basis. That represented an increase of 47 basis points from the second quarter of this year and 92 basis points from the third quarter of 2006.
Similarly, the rate of loans actually entering the foreclosure process was 0.78% for the quarter, 13 basis points above the second quarter figure and 32 basis points higher than the third quarter of 2006.
Subprime adjustable rate mortgages (ARMs) showed the worst deterioration, with a full 4.72% of the outstanding loans starting the foreclosure process during the period.
MBA Chief Economist Doug Duncan said the results were not surprising considering the ongoing fallout in the housing market.
"This is the first quarter which 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," Mr. Duncan said in a release. "The predictable results are increased delinquency and foreclosure."
The MBA survey found that 43% of the loans entering foreclosure during the third quarter were subprime ARMS, which represent 6.8% of all mortgage loans outstanding. Prime ARMs, those offered to more creditworthy borrowers, also climbed significantly, rising 40 basis points to 1.02%.
The survey found that delinquencies and foreclosures were most significant in a handful of states, including Florida, California, Ohio and Michigan. Florida and California, the two largest states in terms of mortgages outstanding, had 42.4% of the total foreclosure starts for prime ARMs and 33.7% for subprime ARMs during the quarter.
Mr. Duncan said the problem in states like California is an excess in supply caused by over building and properties returning to the market. In other states, the housing woes can be attributed to economic dislocation and traditional reasons such as a change in marital status or unforeseen medical expenses.
December 6, 2007 Wall Street Journal
WASHINGTON -- The number of mortgage loans at least 30 days past due reached its highest point since 1986 during the third quarter as foreclosure starts increased across all loan types, according to a Mortgage Bankers Association survey released Thursday.
The quarterly survey found the delinquency rate for mortgage loans on one-to-four unit residential properties was 5.59% during the third quarter on a seasonally adjusted basis. That represented an increase of 47 basis points from the second quarter of this year and 92 basis points from the third quarter of 2006.
Similarly, the rate of loans actually entering the foreclosure process was 0.78% for the quarter, 13 basis points above the second quarter figure and 32 basis points higher than the third quarter of 2006.
Subprime adjustable rate mortgages (ARMs) showed the worst deterioration, with a full 4.72% of the outstanding loans starting the foreclosure process during the period.
MBA Chief Economist Doug Duncan said the results were not surprising considering the ongoing fallout in the housing market.
"This is the first quarter which 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," Mr. Duncan said in a release. "The predictable results are increased delinquency and foreclosure."
The MBA survey found that 43% of the loans entering foreclosure during the third quarter were subprime ARMS, which represent 6.8% of all mortgage loans outstanding. Prime ARMs, those offered to more creditworthy borrowers, also climbed significantly, rising 40 basis points to 1.02%.
The survey found that delinquencies and foreclosures were most significant in a handful of states, including Florida, California, Ohio and Michigan. Florida and California, the two largest states in terms of mortgages outstanding, had 42.4% of the total foreclosure starts for prime ARMs and 33.7% for subprime ARMs during the quarter.
Mr. Duncan said the problem in states like California is an excess in supply caused by over building and properties returning to the market. In other states, the housing woes can be attributed to economic dislocation and traditional reasons such as a change in marital status or unforeseen medical expenses.
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