Foreclosures, Mortgage Delinquencies Highest in Nearly 30 Years
The number of home foreclosures during the first quarter faced by Americans is the highest it's been in almost thirty years, as borrowers who fell behind on payments were unable to sell their homes.
The Mortgage Bankers Association said in a report today that new foreclosures rose to a seasonally adjusted 0.99 percent of all U.S. home loans, up from 0.83 percent in the fourth quarter. The total inventory of homes in foreclosure increased to 2.47 percent and the delinquency rate, loans with one or more payments overdue, grew to 6.35 percent. All were the highest since 1979, the Washington-based trade group said.
The U.S. real estate sales has been stalled by falling home prices, making it difficult for people who can't pay their mortgages to sell the properties. The increase in foreclosures was led by states with the biggest price declines over the past two years, said Jay Brinkmann, MBA's vice president of research and economics. California, Florida, Nevada and Arizona accounted for 89 percent of the gain in new foreclosures, he said.
"Price drops mean that even the best borrowers who run into trouble can't get out of their mortgage by selling, particularly in those states,'' Brinkmann said in an interview. "There's a bleed-over to the rest of the U.S. because until those markets work through their problems, investors in mortgage-backed securities are going to be nervous and credit is going to be tight for everyone.''
California's Woes
Prime adjustable-rate mortgages in California, the largest U.S. state, accounted for 36 percent of all U.S. foreclosures started during the period. The state's subprime adjustable loans were 26 percent of the national total.
The Mortgage Bankers report is based on a survey of 45.2 million loans by mortgage companies, commercial banks, thrifts, credit unions and other financial institutions.
The delinquency rate for subprime loans was 18.79 percent, up from 17.31 percent in the fourth quarter, according to the report. The gain was led by loans 30 to 59 days late, at 8.83 percent. The delinquency rate for subprime adjustable-rate mortgages was 22.07 percent and the so-called seriously delinquent share, loans 90 days or more overdue, was 24.11 percent, the report said.
Published on June 5, 2008
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