Mortgage delinquencies set new record in third quarter

Unemployment Remains Main Cause of Delinquencies

The second quarter of this year saw mortgage delinquencies reported by the Mortgage Bankers Association hit the highest level since they began keep track of the data almost 40 years ago back in 1972. Unfortunately that record didn’t stand long and was broken by the mortgage delinquency rate for third quarter as the delinquency rate on one-to-four-unit residential properties rose to a new record rate of 9.64 percent.

Included in the MBA’s report as a “delinquency” are loans that are at least one payment past due, but does NOT include loans somewhere in the process of foreclosure. At the end of third quarter 4.47 percent of mortgage loans were in the foreclosure process. Therefore 14.11 percent of mortgage loans are actually delinquent once we add in the ones in foreclosure. This is a staggering and sobering statistic…it means nearly 1 in 6 homeowners in the U.S. with a mortgage is struggling to make their house payments. With this in mind I ask, so where exactly is this “recovery” I keep reading about? I’m not a gloom and doom type, but I just don’t see the bottom yet.

Other highlights from the MBA report include:

• Delinquency rate increased for all loans to 9.64 percent from 9.24 percent in 2nd quarter. A year ago the delinquency rate was 6.99 percent.
  • Prime loan delinquency rate increased to 6.84 percent from 6.41 percent in 2nd quarter, a year ago the rate was 6.59 percent.
  • Sub-prime loan delinquency rate increased to 26.42 percent from 25.35 percent in 2nd quarter, a year ago the rate was 20.03 percent.
  • VA loan delinquency rate increased to 8.08 percent from 8.06 percent in 2nd quarter, a year ago the rate was 7.28 percent.
  • FHA loan delinquency rate decreased to 14.36 percent from 14.42 percent for 2nd quarter, a year ago the rate was 12.92 percent.
• The foreclosure rate for all loans at the end of 3rd quarter was 4.47 percent, an increase from 4.30 percent in 2nd quarter. A year ago the foreclosure rate was 2.97 percent.
  • Prime loan foreclosure rate increased to 3.20 percent from 3.00 percent in 2nd quarter, a year ago the rate was 1.58 percent
  • Sub-prime foreclosure rate increased to 15.35 percent from 15.05 percent in 2nd quarter, a year ago the rate was 12.55 percent.
  • VA loan foreclosure rate increased to 2.29 percent from 2.07 percent in 2nd quarter, a year ago the rate was 1.46 percent
  • FHA loan foreclosure rate increased to 3.32 percent from 2.98 percent in 2nd quarter, a year ago the rate was 2.32 percent.
• States with the highest delinquency rates:
  • Mississippi 14.40 percent
  • Nevada 14.00 percent
  • Georgia 12.93 percent
• States with highest foreclosure rates
  • Florida 12.74 percent
  • Nevada 9.44 percent
  • Arizona 6.17 percent

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