Foreclosures Increase at Record Rate

More than one U.S. mortgage in eight is either past due or in foreclosure, as the number of new foreclosures rose sharply in the first quarter of the year.

The Mortgage Bankers Association National Delinquency Survey says that foreclosures were initiated against 1.37 percent of all U.S. mortgages in the first quarter of 2009, up from 1.08 percent in the last quarter of 2008. The increase is the sharpest quarterly jump since the MBA started tracking the data back in 1972.

Results of the privately published report were reported today by CNN, MarketWatch and the Associated Press, among others.

Prime mortgages increasingly involved

The MBA reported that for the first time since the subprime lending crisis began, prime fixed-rate mortgages made up the majority of new foreclosure actions. New foreclosure on prime loans, which make up the majority of all mortgages, doubled over the past year, to 0.61 percent from 0.29 percent of all prime mortgages.

Nearly 6 percent of all prime loans are either past due or at some point in the foreclosure process, the report said, compared to almost half of subprime adjustable rate mortgages.

13 percent in financial trouble

The number of homes in the foreclosures process rose to 3.85 percent of all outstanding mortgages in the first quarter, up from 3.3 percent in the last three months of 2008, also a record increase. The number of mortgages past due but not in foreclosure rose to 9.12 percent on a seasonal basis, up from 7.88 percent the previous quarter. Taken together, it means that 13 percent of all U.S. mortgages are in some kind of financial trouble.

Foreclosures were initiated against 616,000 properties in the first quarter, according to the report, with 46 percent of them concentrated in the "sand states" of California, Nevada, Arizona and Florida.

The MBA report is based on data surveyed from 45 million mortgages, covering more than four out of five U.S. mortgages.