by Bill McBride on 6/05/2008 11:05:00 AM
Thursday, June 05, 2008
From the MBA: Delinquencies and Foreclosures Increase in Latest MBA National Delinquency Survey (hat tip Ed)
The percent of loans on which foreclosure actions were started during the quarter was 0.99 percent on a seasonally adjusted basis, 16 basis points higher than the previous quarter and up 41 basis points from one year ago.ARMs are a key problem, both subprime and prime:
The seasonally adjusted total delinquency rate is the highest recorded in the MBA survey since 1979 ...
Once again this quarter, the rate of foreclosure starts and the percent of loans in the process of foreclosure are the highest recorded since [the survey started in] 1979.
“[W]hile subprime ARMs represent 6 percent of the loans outstanding, they represented 39 percent of the foreclosures started during the first quarter. Prime ARMs represent 15 percent of the loans outstanding, but 23 percent of the foreclosures started. Out of the approximately 516,000 foreclosures started during the first quarter, subprime ARM loans accounted for about 195,000 and prime ARM loans 117,000, but the increase in prime ARM foreclosures exceeded subprime ARM foreclosures with increases of 29,000 and 20,000 respectively over the previous quarter.” [said] Jay Brinkmann, MBA’s Vice President for Research and Economics.That last comment is important - even though there were still more subprime than prime ARM foreclosures in Q1, the problems are really accelerating in the prime ARM segment.
Posted by Bill McBride on 6/05/2008 11:05:00 AM