MBA - Home foreclosures at record in first quarter of 2008

The MBA survey of delinquent mortgage loans on one-to-four-unit residential properties is at its highest level since 1979. Approximately 516,000 foreclosures that started during the first quarter and the percent of loans in the process of foreclosure are also the highest recorded since 1979.

The seasonally adjusted delinquency rate for mortgage loans on one-to-four-unit residential properties stood at 6.35 percent of all loans outstanding at the end of the first quarter of 2008 on a seasonally adjusted (SA) basis, up 53 basis points from the fourth quarter of 2007, and up 151 basis points from one year ago, according to MBA’s National Delinquency Survey.

The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process was 2.47 percent at the end of the first quarter, an increase of 43 basis points from the fourth quarter of 2007 and 119 basis points from one year ago.

The percent of loans on which foreclosure actions were started during the quarter was 0.99 percent on a seasonally adjusted basis, 16 basis points higher than the previous quarter and up 41 basis points from one year ago.

Certain loan types, like ARMs, are driving foreclosure start rates more than the decline in home prices according to the MBA. This is in contrast to augmented anecdotal evidence where negative LTVs are the primary cause for loan defaults.

Prime fixed rate loan foreclosure starts increased 7 basis points to 0.29 percent over the previous quarter and prime ARM foreclosure starts increased 49 basis points to 1.55 percent.
Subprime fixed foreclosure starts increased 28 basis points to 1.80 percent and subprime ARM foreclosure starts increased 106 basis points to 6.35 percent.

a small silver lining:
About 20 states had drops in their number of foreclosures started, including Michigan, Ohio and Indiana where problems have been the most severe for the last several years.



source: Delinquencies and Foreclosures Increase in Latest MBA National Delinquency Survey
Date: 6/5/2008
http://www.mortgagebankers.org/NewsandMedia/PressCenter/62936.htm