Percentage of Homes in Foreclosure Fell in Q2

Washington, DC, Aug. 26, 2010--The percentage of homes somewhere in the foreclosure process fell in the second quarter, the first drop since 2006 and the largest quarter-to-quarter drop since 2005, the Mortgage Bankers Association reported on Thursday.

However, the association's quarterly delinquency report showed that short-term delinquencies are increasing, which could signal another rise in foreclosures to come.

The percentage of mortgage loans somewhere in the foreclosure process was 4.57% in the second quarter, down from 4.63% in the first quarter; the percentage is still up from 4.3% a year ago.

However, the percent of loans one payment behind is now a seasonally adjusted 3.51%, said Jay Brinkmann, the MBA's chief economist, in a news release. The percentage peaked in the first quarter of 2009 at 3.77%.