The Mortgage Bankers Association reported today that fixed-rate mortgages made to prime borrowers accounted for nearly one-third of new foreclosures during the first quarter of 2009. Additionally, half the loans currently in foreclosure are held by prime borrowers. About 43% in foreclosure are subprime mortgages, and 7% are Federal Housing Administration loans, the group said.

"What has changed is the shifting of the problem somewhat away from the subprime and option ARM/Alt-A loans to the prime, fixed-rate loans," said Jay Brinkmann, the MBA's chief economist. "The foreclosure rate on prime, fixed-rate loans has doubled in the last year, and, for the first time since the rapid growth of subprime lending, prime, fixed-rate loans now represent the largest share of new foreclosures. More than anything else, this points to the impact of the recession and drops in employment on mortgage defaults."

Brinkmann added that California, Florida, Arizona and Nevada continue to have an "oversized impact" on national foreclosure figures. The four states account for almost half of all foreclosure starts in the country, and represented half of the increase in prime, fixed-rate foreclosure starts.