Late Pays Fell in '02 Despite Foreclosure Record

The percentage of homeowners who were delinquent on their mortgage payments dropped late last year despite a modest increase in the share of loans that were in foreclosure, according to the Mortgage Bankers Association of America.Doug Duncan, chief economist of the MBA, said delinquencies likely peaked in the second quarter of last year, while foreclosures are still working their way through the system. Overall, 4.53% of home loans were delinquent at the end of 2002, down 13 basis points from the level of three months earlier. The percentage of loans in the foreclosure process was 1.18% in the fourth quarter, up 3 bps from that of the third quarter. However, the number of loans entering the foreclosure process fell in the fourth quarter, providing further evidence that late-payment problems may have peaked, though Mr. Duncan said he remains cautious about the employment situation. The MBA can be found online at http://www.mbaa.org.