Mortgage Loan Delinquencies Rose in 2d Period
WASHINGTON - The delinquency rate on home mortgages rose in the second quarter to its highest level since 1986, the Mortgage Bankers Association of America said Friday.
The association found that payments on 5.28% of mortgages on one- to four-family homes were at least 30 days late as of June 30, up significantly from 4.95% three months earlier and 4.52% in June 1990.
The delinquency record was set in 1985 at 6.07%, when the collapse of the oil economy in the Southwest caused thousands of people to walk away from their homes.
The findings from the group's national survey of residential loan delinquencies suggest that more homeowners are feeling pinched by the recession.
"Things could still get worse before they get better," said James W. Nelson, president of the Mortgage Bankers Association.
Foreclosures Seen as Rising
Foreclosures, in particular, are likely to rise significantly in coming months. Foreclosures were started in the second quarter on 0.36% of all conventional, Veterans Affairs, and Federal Housing Administration mortgages, compared with 0.31% in both the first and second quarters of 1990.
But the data do not mean the economy is still in decline, Mr. Nelson said. Delinquencies and foreclosures are considered a lagging economic indicator. Because homeowners generally go to great lengths to keep mortgage payments current, these payments tend to fall behind late in the recessionary cycle.
All three categories of delinquency - 30, 60, and 90 days past due - were higher in the second quarter. Those 30 days late rose the most.
While foreclosures were initiated at a quicker pace during the quarter, the share of loans in foreclosure declined slightly to 0.96% from 0.97% in the first quarter and 0.93% in the 1990 second quarter.
All Regions Affected
The rising delinquency trend cut across all regions of the country, with deterioration most pronounced in the Southeast and the Northeast.
Among the findings:
* 3.64% of loans were 30 to 59 days past due in the second quarter, up from 3.41% in the first quarter and 3.13% in the 1990 second quarter of last year.
* 0.86% were 60 to 89 days past due, up from 0.79% in the first quarter and 0.70% in the 1990 second quarter.
* 0.78% were 90 or more days past due, up from 0.75% in the first quarter and 0.69% in last year's second quarter.
* Conventional-loan delinquencies rose to 3.43% in the second quarter from 3.32% in the first and 2.85% in the 1990 second quarter. The rise occurred chiefly in the 30 to 59 days category, which rose to 2.45% in the second quarter from 2.34% in the first and 2.07% in the June 1990 quarter.