Foreclosures decreased nationally in the second quarter of 2010 compared to Q110, but mortgage delinquencies increased, suggesting that foreclosures could rise by next quarter. According to the Mortgage Bankers Association's quarterly delinquency index released today, the delinquency rate for a prime adjustable-rate mortgage (ARM) increased 47 basis points (bps) to 9.3% while the rate for a fixed-rate mortgage (FRM) increased 8bps to 4.75%. Foreclosures for both types of mortgage loans remained relatively flat quarter-over-quarter, ARMs dropping only 4 basis points to 3.92% and FRMs increasing 1 basis point to 1.11% With regard to subprime mortgages, ARM delinquency rates jumped 114bps points to 30.9% and foreclosures fell 113bps to 10.6%. Subprime FRMs followed a similar, less drastic, trend, with delinquencies climbing 56bps to 22.5% and foreclosures falling 24bps to 4.8%. The delinquency rates for Federal Housing Administration and Veteran Affairs loans increased to 13.9% and 7.7% while foreclosure on these loans decreased to 2% and 1.3%, respectfully. Mississippi had the highest delinquency rate at 13.7% and Nevada had the highest foreclosure rate at 2.9%. The number of people filing for unemployment benefits fell for the first time in a month, with initial claims falling 6.1% for the week ending Aug. 21. The decline exceeded analysts’ expectations; most consensus estimates had projected a slight decrease from the prior week, when about half a million people filed initial unemployment claims. The Labor Department said Thursday that seasonally-adjusted initial claims slid to 473,000 last week, down from an upwardly revised 504,000 for the previous week. Meanwhile, mortgage modifications continue to disappoint, with JPMorgan Chase converting less than one-quarter of its distressed mortgage book. The number of homes canceling out of the Home Affordable Modification Program is also accelerating. Write to Christine Ricciardi.