Foreclosures Increase 27%
Washington-Residential foreclosure starts jumped 27% in the first quarter to 1.33% of all outstanding residential loans as state moratoriums expired and it became clear that certain at-risk homeowners cannot qualify for government-mandated loan modification programs.
At yearend the foreclosure start rate was 1.08%. According to figures compiled by the Mortgage Bankers Association, 9.12% of all home mortgages were in some stage of delinquency/foreclosure at the end of March. The non-seasonally adjusted delinquency rate was 12.07%.
Mortgage Servicing News estimates that consumers owe $9.585 trillion on their loans, which means some $874 billion of residential loans are late. Also, one-quarter of all subprime loans ($188 billion, according to MSN) are delinquent, compared to 21.88% at yearend.
MBA chief economist Jay Brinkmann said it is the highest jump in foreclosure starts ever, adding that 40% of starts involve vacant homes.
Mr. Brinkmann noted that prime mortgages had the largest share (53%) of foreclosures starts. Also, prime ARMs (which include option-ARMs and alt-A loans) had a higher foreclosure start and a higher 90-day delinquency rate than Federal Housing Administration-insured mortgages.
Meanwhile, the serious delinquency rate (loans 90 days or more past due or in foreclosure) rose 94 basis points in the first quarter to 7.28%.