Foreclosures Climb to New Record High, Again
For the third quarter in a row, foreclosures have climbed to a new record.
Sept. 6, 2007— -- Confirming what sent stock markets on a roller coaster in August, the Mortgage Bankers Association Thursday said a record number homeowners received foreclosure notices in their mailboxes this past spring.
Millions more were late making their monthly payments.
U.S. markets dropped after the figures were released, but then quickly rebounded and traded higher.
For the third quarter in a row, the number of homes entering foreclosure rose. From April to May, 0.65 percent of the 44 million homes surveyed by the Mortgage Bankers Association entered into foreclosure.
Nationwide, the total number of homes in foreclosure increased to 1.4 percent from 1.28 percent at the start of the year.
This rate is approaching the percentage of homes in foreclosure seen during the 2002 recession. But unlike five years ago, when job losses led to the rise in foreclosure, this time it's homeowners struggling to make their payments as mortgage interest rates reset from low teaser rates to higher levels.
The number of homeowners with adjustable rate mortgages falling into foreclosure has been steadily increasing over the past year.
The MBA in its quarterly National Delinquency Survey also found that nationwide, 5.12 percent of mortgage loans were more than 30 days delinquent. That represents an increase of nearly three-quarters of a percentage point from a year ago.
The news for subprime lenders was even worse. For all types of subprime loans, 14.82 percent were delinquent, an increase of more than 3 percentage points from the same period a year ago.
Subprime borrowers with adjustable rate mortgages had the toughest time making their monthly loan payments, 16.95 percent of them were late, nearly 5 percentage points more than a year ago.
Subprime loans are provided to customers with poor or risky credit histories and often carry higher interest rates.
Doug Duncan, chief economist with the mortgage banking group, stressed that the rise in foreclosures and delinquencies can be largely attributed to specific regions of the country.
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