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Mortgage Delinquencies Up Sharply During 3rd Quarter

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From Associated Press

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.

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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.

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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.

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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%.

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