WASHINGTON: US mortgage woes hit fresh highs in the fourth quarter of 2008 with more than one out of 10 homeowners late on their payments, an industry survey showed on Thursday.
The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to 7.88 percent of all loans outstanding as of the end of the fourth quarter of 2008, the Mortgage Bankers Association said.
That was the highest since the group began collecting data in 1972. The figure was up 0.89 percentage points from the third quarter of 2008, and up 2.06 percentage points from one year ago.
The percentage of loans in the foreclosure process at the end of the fourth quarter was 3.30 percent, an increase of 0.33 points from the third quarter of 2008 and 1.26 percentage points from one year ago.
The combined percent of loans in foreclosure and at least one payment past due was 11.93 percent - the highest ever recorded by the group.
Jay Brinkmann, MBA's chief economist, said a relatively low pace of foreclosures might be the result of a halt to actions by many banks as well as government mortgage finance firms Fannie Mae and Freddie Mac.
"The rate of new foreclosures has remained essentially flat for the last three quarters of 2008. This might be seen as a good sign for mortgage performance, but most other measures point to exactly the opposite conclusion," he said.
"The percentage of loans 90 days or more past due jumped sharply in the fourth quarter. Normally servicers would have initiated foreclosure actions on a significant portion of these loans but delayed doing so for a variety of reasons, including working on loan modifications, complying with the guidelines of different investors, and various delays in different locales."
The survey came a day after President Barack Obama's administration unveiled the details of a 75-billion-dollar rescue plan to stem rising home foreclosures.
The Treasury Department said between seven and nine million homeowners could be helped through the programme through either home loan modifications or mortgage refinancings.
Source: Channel News Asia, 6 Mar 2009
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