The Mortgage Bankers Association’s National Delinquency Survey for the fourth quarter of 2007 found foreclosures at an all-time high, while delinquencies were at their highest level since 1985. The trade organization said one of the largest problems now facing housing markets nationwide were borrowers “giving up.” “We’re seeing people give up even before they get to the reset because they couldn’t afford the home in the first place,” Jay Brinkmann, vice president of research and economics for the Washington-based trade group, is quoted by Bloomberg as saying. The rate of loans entering the foreclosure process was 0.83 percent on a seasonally-adjusted basis, the MBA said Thursday, five basis points higher than the previous quarter and up 29 basis points from one year ago. The delinquency rate for mortgage loans on one-to-four-unit residential properties stood at 5.82 percent of all loans outstanding in the fourth quarter of 2007, up 23 basis points from the third quarter of 2007, and up 87 basis points from one year ago.

Fourth quarter foreclosure distribution

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Foreclosures were spread out across the credit spectrum during the quarter, with 38 percent of foreclosure starts involving prime fixed or adjustable-rate mortgages. The table to the right provides a look at the percent of all loans and how each class was represented in overall foreclosure starts. California and Florida continue to represent a disproportionate share of the foreclosure starts in the country, the MBA said. Those two states represent 21 percent of all loans outstanding, but accounted for 30 percent of foreclosure starts in the US. More importantly, they accounted for 39 percent of all prime ARMs outstanding, but 47 percent of prime ARM foreclosure starts. “Declining home prices are clearly the driving factor behind foreclosures, but the reasons and magnitude of the declines differ from state to state,” said Doug Duncan, MBA’s chief economist. “In states like Ohio and Michigan, declines in the demand for homes due to job losses and out-migration have left those looking to sell the homes with fewer potential buyers, particularly with the much tighter credit restrictions borrowers now face. In states like California, Florida, Nevada and Arizona, overbuilding of new homes created a surplus that will take some time to work through.” For more information, visit

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