Foreclosures Down, But Delinquencies Back Up

The number of delinquent mortgages more than 90 days late--those that are closest to bank repossession--declined during the second quarter, the Mortgage Bankers Association reported on Monday. The country is back to 2007 levels in foreclosures--with fewer borrowers losing their homes to bank repossessions, MBA. reported.

Also, MBA found that loans originated after 2007 are performing better than those issued earlier. Mortgages issued from 2005 through 2007 represent 30 percent of all mortgages. Yet, they account for 65 percent of defaults.

MBA’s report over improvements in foreclosures were masked by a slight rise in the number of troubled mortgages--borrowers who have missed at least one payment--during the second quarter. While delinquencies only increased 0.12 percentage points to 8.44 percent, experts say after two years of improvement in delinquencies, the increase was worrisome.

"Delinquencies are mirroring what's taking place in the employment market," Jay Brinkmann, the MBA's chief economist, told CNNMoney.

Source: “Number of Troubled Mortgages on Rise Again,” CNNMoney (Aug. 22, 2011)