Over 9% Past Due or in Default on Home Loans

The percentage of loans that were delinquent or in foreclosure rose to a record 9.16% during the second quarter, an all-time high. During a conference call with reporters, Jay Brinkmann, the new chief economist at the Mortgage Bankers Association, said that both the overall delinquency rate of 6.41% and the foreclosure inventory of 2.75% represented record highs for the MBA survey. The foreclosure inventory is up 135 basis points from the level recorded a year earlier and 28 bps from that of the first quarter. Mr. Brinkmann said the deterioration in credit quality continues to be driven by conditions in California and Florida. Those two states accounted for 39% of all foreclosures started in the second quarter and 73% of the increase in foreclosures, he said. The MBA can be found online at http://www.mortgagebankers.org.