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[ThatHawaiiGuy]

U.S. Mortgage Delinquencies Rose in Second Quarter
Wed Sep 10, 2:27 PM ET

By Deborah Lagomarsino

WASHINGTON -- More U.S. households were behind on their mortgage payments in the second quarter, but fewer home loans were in foreclosure, the Mortgage Bankers Association of America said Wednesday.


The seasonally adjusted delinquency rate for all mortgage loans on one- to four-family residential properties rose to 4.62% in the second quarter of 2003 from 4.52% in the first quarter, MBA said. In the second quarter of 2002, the delinquency rate was 4.77%.


The rise in past-due loans was driven mainly by an increase in the percentage of loan payments overdue by 90 days or more. In the second quarter, 0.84% of all loans fell into this category, up from 0.76% in the first quarter.


"The uptick in seriously delinquent loans [those 90 days or more past due] is a sign that the length of the sluggish economic recovery has been causing problems for some borrowers," the MBA said.


However, fewer loans were in the foreclosure process during the second quarter than in the first quarter. In the second quarter, 1.12% loans were in foreclosure, down from 1.20% at the end of the first quarter, the MBA said.


The percentage of loans entering the foreclosure process also fell, declining to 0.32% in the second quarter from 0.37% in the first quarter.


"Despite a very healthy housing market in most of the country, the overall economy remained weak, though growing, in the second quarter," said Doug Duncan, MBA's senior vice president and chief economist.


"The trends of record consumer bankruptcies and significant job losses, along with war-related business uncertainties and related rising energy prices, prevented a robust improvement in the performance of the mortgage portfolio," he said.


Mr. Duncan predicted that as the economy firms, there will be fewer delinquencies and foreclosures.


"The resumption of strong economic growth will ultimately increase employment and should lead to lower levels of delinquencies and foreclosures in future quarters," Mr. Duncan said.


Delinquency rates rose for all three types of mortgage loans - conventional, Federal Housing Authority and Veterans Administration - in the second quarter, the MBA said.


The past-due rate for conventional loans rose to 3.14% in the second quarter from 3.10% in the first quarter. Within that category, the delinquency rate for prime loans - made to borrowers of normal credit quality - slipped to 2.60% in the second quarter from 2.62% in the first quarter.


Past-due rates for subprime mortgages, which are home loans to riskier borrowers, rose in the second quarter to 12.99% from 12.40% in the first quarter.


For FHA-guaranteed mortgage loans, the delinquency rate rose to 12.59% in the second quarter from 11.65% in the first quarter, and for VA-guaranteed mortgage loans, the delinquency rate rose to 8.24% from 7.89%.


The MBA's second-quarter survey includes nearly 34 million loans.


-By Deborah Lagomarsino, Dow Jones Newswires; 202-862-9255; [e-mail]

http://story.news.yahoo.com/news?tmpl=story&u=/dowjones/20030910/bs_dowjones/200309101427001248


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