Mortgage Delinquencies Up Sharply During 3rd Quarter

Mortgage delinquencies rose sharply from July through September, the Mortgage Bankers Assn. said Monday in a report that it said was further proof that the economy is in a downturn.

“Overall delinquency rates are essentially the same as a year ago,” Executive Vice President Warren Lasko said. “But following a dip earlier this year, we now see a significant upward movement in all categories of delinquencies.

“Unfortunately, in the context of higher unemployment rates and a decline in home price appreciation, we may be looking at further evidence that a recession is upon us,” he added.

Indeed, the association report said it “would not be surprising for delinquency rates to stay at the higher levels of the third quarter and perhaps to even drift up a bit more, given the state of the economy, particularly in the New England states.”

The association survey said the delinquency rate was 5%, up from 4.52% in the second quarter and 4.41% in the first. The rate in the third quarter of 1989 was 4.96%.

The survey also found that foreclosures had risen slightly. The 0.33% rate compared to a 0.31% rate the previous quarter.

Contributing most to the delinquency increase were mortgages 30 days past due. This category, which provides the least concern, rose to 3.47% in the third quarter from 3.13% in the second quarter .

But mortgages with 60-day delinquencies increased to 0.78% from 0.70%, while those that were 90 days late rose to 0.75% from 0.69%.

“On a regional basis, delinquency rates were higher in the Northeast and South, but were lower in the Midwest and West compared to year-ago levels,” the report said. “During the same time period, the percentage of loans in foreclosure fell in the Midwest and West but rose in the Northeast and South.

Delinquencies in the West dropped from a 4.08% rate in the third quarter of 1989 to 3.98% from July through September, while the foreclosure rate fell from 1.14% last year to 0.74%.