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More Foreclosure Data: This Time From Mortgage Bankers

I hate to confuse the situation any more, especially after all the lovely emails so many of you sent, berating me for publicizing the foreclosure data from RealtyTrac. God I love my job…but I am forced today to report more, because, well, that’s what I do.

This time it’s from the Mortgage Bankers Association,which conducts a survey of loan servicers and claims to have data on 44 million loans. This is the “National Delinquency Survey.” It covers over 80% of the approximately 50 million outstanding loans, including more than half of the nonprime market.

Unlike RealtyTrac, which lumps together positively everything, from delinquencies, to loans in foreclosure, entering foreclosure, bank repossessions, etc., and which admits that it can count the same house one, two even three times in the process--the MBA breaks it all down very cleanly and as follows:

According to the MBA, 1.28% of all loans outstanding in the U-S were in the foreclosure process in the first quarter of this year. That’s up from 1.19% in the fourth quarter of last year and is up from 0.98% in the first quarter of 2006. The average since 1990 is 1.1%, so that is a jump.

Next category--loans starting the foreclosure process--and this is where we're seeing the big gains. 0.58% of all loans were starting the foreclosure process. That's up from .54% in the last quarter of 2006 and from 0.41% a year ago. That also happens to be a new all time high.

The last category: Delinquencies. This is when you're late on your payments, but you have not entered the foreclosure process yet. 4.84% of all loans outstanding were delinquent in the first quarter of this year; that's actually down from 4.95% in the fourth quarter of 2006 but up from 4.41% a year ago.

The mortgage bankers say that jump in loans starting new foreclosures is all thanks to a few of those big housing boom states that are now in real trouble: Florida, California, Nevada, and Arizona, with those states taking big jumps.

“Information provided to the MBA from a variety of sources indicates that the foreclosures in Fl, NV, CA and AZ are heavily influenced by speculators who are walking away from properties now that home prices have started to fall in areas of those states and they face resets in the adjustable-rate mortgages they took out for these homes.”

Didn’t need a press release to tell me that.

And speaking of ARMS--the rate of foreclosures started on subprime ARMS jumped from 2.7% to 3.23%. The delinquency rate for subprime loans increased to 13.77%, which is not a record, but these are all loans that could enter foreclosure if they aren’t worked out by banks, lenders, whoever. This is not to say that foreclosures didn’t rise for the primes. They did increase slightly in foreclosure starts and in the process.

Okay, so delinquencies overall didn’t take a jump, but foreclosures and properties entering foreclosure did. As I said, we’ve got a new record. The folks over at the MBA today told me they refer to RealtyTrac as “RealtyCrap”. We don’t have a big number like 90% as we did on Tuesday, but even the very complicated and very detailed MBA report shows that subprime mortgage foreclosures are on the rise, and those very hot speculator states of the boom are in real trouble.

Like I always say, all real estate is local, so no, the whole country is not up on the auction block. But if you live in some of those western states or in Florida, you’ve got to be careful. On the bright side, there could be a lot of good properties going on the block that you could get for a song.

Questions? Comments? RealtyCheck@cnbc.com

  • Diana Olick serves as CNBC's real estate correspondent as well as the editor of the Realty Check section on CNBC.com.

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