According to a National Delinquency Survey released Friday by the Mortgage Bankers Association — the number of homes caught in the wave of foreclosures in the third quarter reached a record 1.35 million, driving the foreclosure rate up to 2.97%. That’s a 76% increase on a year-over-year basis. The seasonally adjusted total delinquency rate continues to be the highest recorded in the MBA survey.
At the same time, the number of homeowners falling behind on their mortgages rose to 6.99%, up from 5.59%. The delinquency rate includes loans that are at least one payment past due but does not include loans somewhere in the process of foreclosure a year ago, the association said.
The increase in the overall delinquency rate was driven by increases in the number of loans 90 or more days past due, primarily in California and Florida“.
However, “the 30 day delinquency percentage remains below levels seen as recently as 2002”.
Jay Brinkmann, MBA’s Chief Economist and Senior Vice President for Research and Economics said:
An initial look at the number of foreclosure starts would seem to indicate at least a leveling off of foreclosures. These numbers, however, are being influenced by several factors including various moratoria on foreclosure filings and by mortgage companies holding loans in the 90+ day bucket during the modification and workout process.
Falling home values and a tough economic environment keeps filtering through the housing market which contributes, in turn, to more job losses thus driving mortgage delinquencies higher. On a year-over-year basis, the seasonally adjusted delinquency rate increased for all loan types, except FHA loans.
Again here, much of prime and subprime ARMs remain concentrated in a few states, with California and Florida having the highest share of foreclosures ; 54% and 41% foreclosure starts respectively. Brinkmann thinks, that “until those two markets turn around, they will continue to drive the national numbers.”