Mortgage Delinquency Rate Hits 29-Year High in Second Quarter of 2008

Mortgage delinquencies for U.S. homes in the second quarter of 2008 moved up six basis points from the previous quarter to 6.41% of all loans outstanding, marking a 29-year high, according to the MBA's National Delinquency Survey released Friday.

From one year ago, delinquency rates have risen 129 basis points.

This is the highest rate ever recorded in the index, which began in 1979. Last month's index was a previous high as well; before that, the all-time high recorded was 6.07% in 1985.

New foreclosure starts rose to 1.19%, up from 0.99% in the previous quarter and 0.65% a year ago. Starts from subprime loans rose to 4.70% in the quarter, up from 4.06% in the previous quarter.

The total rate of delinquencies for prime rates rose to 3.93% from 3.71% in the previous quarter. One year ago, the rate was 2.73%.

The total rate of delinquencies for subprime rates fell to 18.67% from 18.79% in the previous quarter. One year ago, the rate was 14.82%.

Total foreclosures rose to a record high at 2.75% in the second quarter, up from 2.47% in the previous quarter and 1.40% from Q2 2007.

The MBA report is based on a sample of more than 44 million mortgage loans serviced by mortgage companies, commercial banks, thrifts, credit unions and others.

By Patrick McGee and edited by Nancy Girgis - CEP News Ltd. 2008