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Mortgage delinquencies inch higher

Delinquencies edged up to 8.32% in the first quarter from 8.25% in the fourth quarter of 2010, the Mortgage Bankers Assn. reports. On the bright side, fewer loans were more than 90 days late and fewer homes entered foreclosure.

May 20, 2011|By E. Scott Reckard, Los Angeles Times
  • As of March 31, 8.32% of homeowners with mortgages had missed at least one payment, up from 8.25% as of Dec. 31, the Mortgage Bankers Assn. said. Above, an abandoned house in Charlotte, N.C.
As of March 31, 8.32% of homeowners with mortgages had missed at least one… (Bob Leverone, Associated…)

The percentage of homeowners who are behind on their mortgage payments inched higher in the first quarter while the number of new foreclosures declined.

As of the end of March, 8.32% of homeowners with mortgages had missed at least one payment, up from 8.25% three months earlier, the Mortgage Bankers Assn. reported Thursday. Michael Fratantoni, an economist at the lender group, interpreted the increase as more of a "leveling off" than a significant change.

The rate, adjusted for seasonal variation, was well below that recorded a year earlier: 10.06% of borrowers were in some stage of delinquency in the first quarter of 2010.

In a positive sign, the percentage of loans that were more than 90 days delinquent was down compared with the previous quarter and the first quarter of 2010.

"Overall, it's a picture of the market on the mend," Fratantoni said.

The delinquency rate does not include homes in the foreclosure process. The trade group said 4.52% of all residential mortgages were in foreclosure in the first quarter on a nonseasonally adjusted basis, down from 4.64% in the fourth quarter of 2010 and 4.63% in the first quarter of 2010.

The percentage of homes entering foreclosure dropped to 1.08% in the first quarter from 1.27% in the fourth quarter.

Increased scrutiny of foreclosures, triggered by revelations that banks cut legal corners as they took back homes, has dragged the repossession process out to unprecedented lengths, industry data firm RealtyTrac said in a recent report that looked at data from April, the first month of the second quarter.

Big banks specializing in customer service on mortgages have agreed to implement new rules imposed by federal regulators in the aftermath of that scandal, including providing a single person to contact for each troubled borrower, while a task force of state attorneys general works to impose more sweeping reforms.

Foreclosure filings, which include initial notices of default, scheduled auctions and bank seizures of property, dropped 9% in April from March and plunged 34% from April 2010 as 219,258 U.S. properties received new filings in April, a study by Irvine-based RealtyTrac showed last week.

California, where the housing picture was once far more grim than the nation's, more closely mirrored the rest of the U.S. in the latest report from the Mortgage Bankers Assn.

Delinquent loans made up 8.31% of all residential mortgages in California during the first quarter, down from 10.88% a year earlier. The rate of loans 90 or more days delinquent was 4.84%, down from 6.98%. Loans in foreclosure had dropped to 3.97% from 5.15%, Fratantoni said.

scott.reckard@latimes.com

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