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2007-03-13 1:57 PM CST

WASHINGTON — Louisiana homeowners have among the highest mortgage delinquency rates in the country according to a Mortgage Bankers Association survey.

In its survey of 43.5 million U.S. home loans outstanding in the fourth quarter of 2006, the MBA found 9.1 percent of those held in Louisiana were behind on their payments. Only Mississippi (10.64 percent) had a higher rate.

The MBA National Delinquency Survey's findings show a national delinquency rate of 4.95 percent, up 28 basis points from the third quarter and up 25 points from a year earlier.

The increase was driven by increases in delinquencies for all major loan types, most notably subprime and Federal Housing Administration loans.

The percentage of loans in the foreclosure process was 1.19 percent, an increase of .14 percent from the third quarter and .2 percent from he end of 2005.

"Although the U.S. economy and job market remain solid, the housing market continued to decelerate in the fourth quarter of 2006. Nationally, house prices increased at a slower rate and the pace of sales and construction activity continued to slow," said Doug Duncan, MBA chief economist and senior vice president of research and business development.

"As we had expected, in the fourth quarter, delinquency rates again increased across the board. Increases in delinquency and foreclosure rates were noticeably larger for subprime loans. Subprime borrowers are more likely to be susceptible to the cumulative increases in interest rates that we have experienced and the resultant nationwide slowing of home price appreciation including outright declines in some markets."

Duncan said the MBA cautions policymakers to avoid any regulatory or legislative actions that would impede the ability of the market to respond to changes in underlying economic conditions.

"Given our macroeconomic forecast of below trend economic growth and a slowly recovering housing market, we would expect delinquency and foreclosure rates to level off as the housing market regains its footing towards the end of 2007," he said.

States with the largest increases in overall delinquency rates from the last quarter were West Virginia (1 percentage point), Maine (.76) and Florida (.69).

Based on the foreclosure inventory rate, the states with the largest increases were Nevada (.25 ), Mississippi (.24), and Massachusetts (.22).

Overall, 49 out of 51 states saw their overall delinquency rate increase, while 44 states saw an increase in the rate of foreclosure inventory.

Late mortgage payments reach high By JEANNINE AVERSA, AP Economics Writer
Tue Mar 13, 6:19 PM ET

Late mortgage payments shot up to a 3 1/2-year high in the final quarter of last year and new foreclosures surged to record levels as borrowers with tarnished credit histories had trouble keeping up with monthly payments.

The Mortgage Bankers Association, in its quarterly snapshot of the mortgage market released Tuesday, reported the percentage of payments that were 30 or more days past due for all loans tracked jumped to 4.95 percent in the October-to-December quarter.

That marked a sharp rise from the third-quarter's delinquency rate of 4.67 percent and was the worst showing since the spring of 2003, when the late-payment rate climbed to 4.97 percent.

The association's survey covers 43.5 million loans.

The latest snapshot of the mortgage market stoked Wall Street investors' worries about troubles facing "subprime" lenders who make loans to people with poor credit. The Dow Jones industrials tumbled 242.66 points.

The percentage of mortgages that started the foreclosure process in the final quarter of last year rose to 0.54 percent, a record high. The previous high, 0.50 percent, occurred in the second quarter of 2002 as the economy was recovering from the blows of the 2001 recession.

Delinquency and foreclosure rates were considerably higher for higher-risk subprime borrowers, especially those with adjustable-rate mortgages.

Lenders to subprime borrowers — people with blemished credit histories — have been battered. Rising interest rates and weak home prices have made it increasingly difficult for these borrowers — especially those with adjustable-rate mortgages — to keep up with their payments. Delinquencies and foreclosures in the subprime mortgage market are spiking.

The late-payment rate for all subprime loans jumped to 13.33 percent in the fourth quarter, up from 12.56 percent in the prior period and the highest in four years. The delinquency rate for subprime borrowers with adjustable-rate mortgages was even higher — 14.44 percent, also the highest in four years.

"Unfortunately, it appears delinquency rates will likely worsen before they improve," said Gina Martin, economist at Wachovia Corp. Economics Group.

The rate of all subprime loans starting the foreclosure process at the end of last year was 2 percent, the highest in three years. The percentage of subprime adjustable-rate mortgages entering foreclosure soared to 2.70 percent, the second-highest on record.

Doug Duncan, the mortgage association's chief economist, suggested that borrowers having difficulties making payments contact their lenders as soon as possible to work together on the problem. "It is in everyone's interest to keep the homeowner in their home paying their bills on time," he said.

Mounting concerns about risky mortgages have been making investors jittery. Those fears contributed to a worldwide stock meltdown on Feb. 27, where the Dow Jones industrials suffered a 416-point plunge.

Worried about defaults on high-risk mortgages, federal bank regulators earlier this month called on lenders to use caution in making subprime loans and strictly evaluate borrowers' ability to repay them.

New Century Financial Corp., which was the nation's second-largest subprime mortgage maker, is scrambling to stay afloat after all its bank lenders cut off funding or informed the company of their intent to do so because of its failure to make payments. The Irvine, Calif.-based company already has stopped accepting all new loan applications.

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On the Net:

Mortgage Bankers Association: http://www.mortgagebankers.org/

2007-03-26 1:36 PM CST

IRVINE, Calif. — RealtyTrac, an online marketplace for foreclosure properties, reports 130,786 foreclosure filings in February down 4 percent from a revised January total but still up 12 percent from February 2006. The report also shows a national foreclosure rate of one foreclosure filing for every 884 U.S. households during the month.

"Based on our numbers for the first two months of 2007, foreclosure activity is running at a rate that would project to a 33 percent increase over 2006," said James Saccacio, CEO of RealtyTrac. "It appears that as subprime and FHA loans default at higher than anticipated rates, and lenders tighten their underwriting standards, we're going to continue to see a spike in the number of homeowners facing foreclosure."

Nevada registered the nation's highest state foreclosure rate for the second month in a row thanks to a 24 percent increase in foreclosure activity from the previous month. The state reported 3,124 foreclosure filings during the month, up 77 percent from February 2006 and a foreclosure rate of one foreclosure filing for every 278 households — more than three times the national average.

A 9 percent month-to-month increase in foreclosure activity gave Colorado one foreclosure filing for every 345 households in February, boosting the state's foreclosure rate to second highest among the states after ranking fourth highest the previous month. Colorado reported 5,310 oreclosure filings during the month, the eighth most of any state.

Florida foreclosure activity spiked more than 63 percent from the previous month, giving it the nation's third highest state foreclosure rate in February, one foreclosure filing for every 382 households. The state reported 19,144 foreclosure filings during the month, the most of any state.

Louisiana's foreclosure rate, one per 2,455 households, was 30th highest in the nation and 40 percent higher than January's rate