Economist Uncertain about 'Roll Rate' Trend

The share of delinquent loans that roll into foreclosure status has skyrocketed recently, but MBA chief economist Jay Brinkmann says he is uncertain if the trend will continue. The most recent quarterly data from the MBA showed a slight decline in the roll rate, though it remains elevated by historical standards. Today, about 35% of loans that are 30 days past due during one quarter are subject to foreclosure proceedings in the following quarter. During the 1990s, the roll rate fell in a range of between 10% and 15%. In a conference call with reporters, Mr. Brinkmann said that high roll rates in California and Florida, as well as in Nevada and Arizona, are driving the dramatic national increase. In recent quarters, roll rates in California and Florida have exceeded 60%. In most areas of the country, including the economically struggling industrial Midwest, the increase in roll rates has been less dramatic. "I don't know if the rest of the country is going to follow more of a Michigan example or how much closer we are going to be to the California model," Mr. Brinkmann said.