WASHINGTON – During the third quarter, 10% of all homeowners were in foreclosure or late in making mortgage payments, according to a report released today by the Mortgage Bankers Association.
The group said 6.99% of mortgages were more than 30 days overdue and 2.97% of the loans were in foreclosure.
The delinquency rate was 22 basis points above the second quarter and 128 basis points above the third quarter of 2007.
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Those figures could increase during the remainder of the year as more people lose their jobs. The Labor Department reported today that unemployment reached 6.7% last month and the 533,000 jobs lost was the highest single-month drop since 1974.
Mortgage Bankers Association Chief Economist and Senior Vice President for Research and Economics Jay Brinkmann said several factors caused the increases.
"While much of the mortgage problem in some states continues to be overbuilding, poor underwriting and incorrect credit pricing, fundamental economic factors are becoming more important. The 30-day delinquency rate is still lower than it was in the 2001 recession, but job losses are mounting," he said in a statement. "We have not gone into past recessions with the housing market as weak as it is now so it is likely that a much higher percentage of delinquencies caused by job losses will go to foreclosure than we have seen in the past."
The study found that nine states had rates of foreclosure starts that were above the national average: Nevada, Florida, Arizona, California, Michigan, Rhode Island, Illinois, Indiana, and Ohio.
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