Dec
6
Foreclosures Reach Record High
Filed Under Housing News
Lenders report sharpest rise in foreclosures ever and highest level of homeowners late in payments since 1986, and warned worst is still ahead.
NEW YORK (CNNMoney.com) — The rate of homeowners going into foreclosure hit a record high in the third quarter, while those late with their payments rose to the highest level since 1986, according to mortgage lenders’ trade group, which forecast that the meltdown in the mortgage and real estate markets shaking the U.S. economy will continue to worsen over the next year.
The Mortgage Bankers Association reported that 0.78 percent of mortgages entered the foreclosure process in the three months ended Sept. 30. That figure is up from 0.65 percent in the second quarter – the previous record high – and more than double the 0.32 percent rate a year earlier.
The homeowners entering foreclosure brought the total percentage of loans in the foreclosure process to a record high as well of 1.69 percent, or 768,000 homes.
The report also showed that 5.59 percent of borrowers are now at least 30 days late making their mortgage payments, which is just below the record high of 5.68 percent set in 1986. And 1.26 percent of the borrowers were 90-plus days late, putting them at significant risk of going into foreclosure.
Doug Duncan, chief economist for the lenders’ trade group, said those rising delinquencies rates suggest that the problems have not hit bottom. He therefore expects late payments and foreclosures could continue to increase through the third quarter of 2008.
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