U.S. mortgage delinquency rates and the percentage of loans that entered the foreclosure process jumped in the third quarter, with both reaching record highs, the Mortgage Bankers Association said on Thursday.
The percentage of loans on which foreclosure actions were started rose to 1.42 percent in the third quarter, an all-time high and up from 1.36 percent in the second quarter.
Rising U.S. unemployment propelled more mortgage delinquencies and foreclosures, a trend that will continue into next year, the MBA said.
It is all about unemployment, everything else is secondary, MBA's chief economist Jay Brinkmann said in an interview.
We expect unemployment to keeping rising into the first quarter of 2010, which means we will most likely see even higher rates of delinquencies and foreclosures, he said.
The delinquency rate for mortgage loans on one-to-four-unit residential properties rose to a seasonally adjusted rate of 9.64 percent of all loans outstanding as of the end of the third quarter of 2009, up 40 basis points from the second quarter and up 265 basis points from one year ago, the MBA said in its National Delinquency Survey.
The delinquency rate broke the record set last quarter. The records are based on MBA data dating back to 1972.
(Reporting by Julie Haviv, Editing by Chizu Nomiyama)