WASHINGTON, D.C. — The nation's housing market continues to break records, but not ones consumers and lenders alike would want to see. According to the Mortgage Bankers Association, the seasonally adjusted delinquency rate rose to 9.24% in Q2, up 12 basis points from the then record-setting Q1, and more than 2.8% from last year. Foreclosures continued their march higher as well, up 45 basis points over the previous quarter to 4.3%. The combined delinquency and foreclosure rate of 13.16% is also the highest ever recorded by the MBA.
The only good news: the percentage of loans 30 days past due is still well below the record set in Q2 1985.
With subprime loans all but worked out of the system, the latest increases are being driven by fixed-rate loans, the MBA reported, with FHA foreclosures and 90-day delinquencies hitting records. Loan modification programs are having an impact, the association said, but foreclosure and delinquency rates are very likely to remain high with option-ARM resets looming in the next few years and unemployment not showing any signs of improvement.
