Home Foreclosures Hit a Record Level

Washington, DC, March 6, 2008—The rate of foreclosures in the fourth quarter was the highest level in the history of the Mortgage Bankers Association’s quarterly delinquency survey.

In addition, the delinquency rate of loans past due but not in foreclosure was at its highest since 1985.

"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, chief economist of the MBA, in a news release.

"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."

In the fourth quarter, the rate of loans entering the foreclosure process was 0.83 percent of all loans outstanding, up from 0.78 percent the previous quarter and 0.54 percent from a year ago.

The percentage of loans at some point in the foreclosure process was 2.04 percent of all loans outstanding, up from 1.69 percent and 1.19 percent a year ago.

The delinquency rate for mortgages was 5.82 percent of all loans outstanding in the fourth quarter, up from 5.59 percent the previous quarter and 4.95 percent a year ago.