The delinquency rate on mortgages backing one-to-four family residential properties rose to 8.44% in the second quarter, up 12 basis points from the first quarter, but still 141 basis points below a year ago, the Mortgage Bankers Association said Monday. As delinquencies rose, the number of homes in foreclosure declined in the second quarter, with the percentage of foreclosure starts on all outstanding loans hitting 0.96%, down 12 basis points from the first quarter and 15 basis points lower than a year earlier. Of all loans outstanding, 4.43% were in foreclosure at the end of the second quarter, down 9 basis points from the first quarter and 14 basis points from a year ago. Serious delinquencies, or loans more than 90 days past due, declined 25 basis points from the first quarter to 7.85% for the second quarter and 126 basis points from 2010 levels. "While overall mortgage delinquencies increased only slightly between the first and second quarters of this year, it is clear that the downward trend we saw through most of 2010 has stopped," MBA Chief Economist Jay Brinkman said. "Mortgage delinquencies are no longer improving and are now showing some signs of worsening. The good news is the continued decline in long-term delinquencies, those mortgages that are three payments or more past due. The bad news is that drop is offset by an increase in newly delinquent loans one payment past due," he said. Brinkmann said the delinquency rate is driven by fluctuations in the labor market. The second quarter brought a new period of economic uncertainty, with weekly initial unemployment claims averaging 432,000 filings, up from 385,000 in the first quarter. "Foreclosure start rates fell to their lowest level since the fourth quarter of 2007," Brinkmann said. "Foreclosure inventory rates also fell, to their lowest level since the third quarter of 2010. "While some have argued that this drop in foreclosures is a temporary drop which does not reflect the problems yet to come, this does not appear to be the case, at least at the national level," he said. "There are still many problem loans that need to be resolved, but the idea that there is a growing backlog of loans being held back from foreclosure is simply not supported by these numbers." Write to: Kerri Panchuk.