Katrina Nudges Up Delinquencies

The overall delinquency rate rose modestly during the third quarter, and the Mortgage Bankers Association says Hurricane Katrina is to blame.As of Sept. 30, 4.44% of residential home loans were delinquent, according to the MBA's quarterly delinquency survey. That was up 10 basis points from the level of June 30, but it was down by the same amount from that of one year earlier. However, the MBA said the increase in the third quarter reflects higher delinquencies in Mississippi (where the delinquency rate rose to 17.44% in the third quarter) and Louisiana (where it rose to 24.63%) stemming from widespread property destruction and damage from the hurricane. Excluding the impact of the hurricane, delinquency rates for all loan types were lower. In fact, excluding the hurricane effect reduces the overall delinquency rate by 13 bps, according to the MBA. The foreclosure rate also declined nationwide in the third quarter.