A record 13.16 percent of mortgage loans on one- to four-unit homes were delinquent or in the foreclosure process at the end of June, the Mortgage Bankers Association reports.
In Florida, 22.8 percent of mortgages were at least one payment behind or in the foreclosure process, followed by Nevada (21.3 percent), Arizona (16.3 percent) and Michigan (15.8 percent).
The rate of new foreclosure starts was essentially unchanged from March, as a large drop in foreclosures on subprime adjustable-rate mortgage (ARM) loans was offset by increases on other types of loans, including prime fixed-rate loans.
MBA Chief Economist Jay Brinkmann said loan modification programs are holding foreclosure rates below where they would otherwise be, but that many foreclosures involve homes that are vacant, borrowers who no longer have jobs, or loans where there was fraud involved.
"It is unlikely we will see meaningful reductions in the foreclosure and delinquency rates until the employment situation improves," Brinkmann said in a statement. In areas where borrowers have mortgages that exceed the value of their homes, he said, life events such a divorce or loss of a job "are likely to translate into foreclosures until prices in those areas recover, not just flatten."
Nationwide, the delinquency rate rose to a seasonally adjusted 9.24 percent, up 12 basis points from the end of March and 283 basis points from one year ago. The non-seasonally adjusted delinquency rate increased 64 basis points from March, to 8.86 percent. A basis point is one-hundredth of a percent.
The percentage of loans in the foreclosure process at the end of the second quarter was 4.3 percent, an increase of 45 basis points from March and 155 basis points from a year ago.
The percentage of loans that are delinquent or in foreclosure are at a peak in records dating back to 1972. The percentage of loans 30 days past due is still well below a record set in second-quarter 1985, the MBA said.
During the second quarter of this year, foreclosure actions were initiated on 1.36 percent of loans, down one basis point from the first quarter and 28 basis points from a year ago.
On a non-seasonally adjusted basis, the foreclosure start rate increased seven basis points for prime loans (to 1.01 percent) and five basis points for FHA loans (to 1.15 percent), while decreasing 52 basis points for subprime loans (to 4.13 percent) and four basis points for VA loans (to 0.68 percent).
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