Foreclosures Up, But Mortgages Stable

By:: Kara Johnson | December 30, 2010

U.S. foreclosure activity rose sharply in the third quarter of the year, not because more people were getting in financial trouble, but because lenders were working through a backlog of delinquent borrowers who had exhausted their options for avoiding foreclosure.

Nearly 187,000 homes were lost to foreclosure in the third quarter of 2010, up 14.7 percent from the second quarter and an annual increase of 57.5 percent from the third quarter of 2009. Total foreclosure activity was up 4.5 percent from the previous quarter, with 1.2 million homes in the foreclosure process, reflecting a 10.1 percent annual increase.

The figures are from the Office of the Comptroller of Currency (OCC) and the Office of Thrift Supervision (OTS), which jointly released the Third Quarter Mortgage Metrics Report on Wednesday.

The rise in overall foreclosures was largely attributed to mortgages remaining in the foreclosure process for extended periods of time, owing to efforts to seek other resolutions and delays caused by the volume of mortgages in foreclosure.

At the same time, the overall mortgage picture remains stable, with 87.4 percent of all mortgages current and performing, unchanged from the second quarter and slightly higher than one year ago. The figures come from the Office of the Comptroller of Currency (OCC) and the Office of Thrift Supervision (OTS), which jointly released the Third Quarter Mortgage Metrics Report Wednesday.

Serious mortgage delinquencies, those more than 60 days past due or to bankrupt borrowers, fell by 6.4 percent, to 1.9 million loans, the third consecutive quarterly decline and its lowest mark in five quarters. However, the OCC and OTS said this was primarily due to these mortgages moving into foreclosure, rather than borrowers becoming current on their loans.

However, early stage delinquencies, those 30-59 days past due, increased for the second consecutive quarter, rising by 4.3 percent. However, at 3.2 percent of the total mortgage portfolio, they remain within the range of 2.8-3.4 percent they have occupied since the last quarter of 2008.

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