NU Online News Service, June 20, 2003, 3:15 p.m. EDT – The percentage of U.S. home mortgage loans in foreclosure increased to 1.2% in the first quarter from 1.18% in the fourth quarter of 2002, according to the Mortgage Bankers Association of America, Washington.
The U.S. home mortgage foreclosure rate is the highest it has been since the association began tracking home mortgage foreclosures in 1972, says Phil Colling, an association economist.
The foreclosure rate “might have been higher during the Great Depression, but we don’t have data going back that far,” Colling says.
The life insurance industry has $244 billion of its assets, or about 8% of the total, invested in residential, agricultural and commercial mortgage loans, according to the American Council of Life Insurers, Washington.
The foreclosure rate for loans to highly creditworthy borrowers increased to 0.56%, from 0.54%, during the fourth quarter of 2002, while the foreclosure rate for loans to subprime borrowers, or borrowers with poor credit, fell to 7.17%, from 7.97%.
But economists at the Mortgage Bankers Association note that the percentage of mortgages that are delinquent but not yet in foreclosure fell slightly during the first quarter. Association economists predict that the delinquency rate will improve in the second half as a result of the tax cuts in the new economic stimulus package and the continuing strength of the refinance market.