Mortgage Delinquencies Reach a Record High
March 1, 2010
About one in seven homeowners with a mortgage was at least one payment behind or in foreclosure in the third quarter of 2009, according to the Mortgage Bankers Association. This is up from about one in 10 a year ago and translates into about 5 million households that are delinquent.
The 14.4 percent rate in the third quarter was the highest rate since the MBA bagan reporting such data in 1972. driven by rising job losses, prime fixed-rate loans made to borrowers with good credit accounted for 33 percent of all new foreclosures in the third quarter, compared with 21 percent a year ago, the MBA said.
“Job losses continue to increase and drive up delinquencies and foreclosures,” said Jay Brinkman, the MBA’s chief economist. “Prime fixed-rate loans continue to represent the largest share of foreclosures started and the biggest driver of the increase in foreclosures. The outlook is that delinquency rates and foreclosure rates will continue to worsen before they improve.
The MBA said loans backed by the Federal Housing Administration are also showing signs of trouble. More than 18 precent of FHA borrowers are at least one payment behind or in foreclosure. The association expects foreclosures to peak in 2011.
Source: Mortgage Bankers Association