Mortgage Delinquency Rate Rises as Inventory Eases

Foreclosure bank owned mortgage delinquency
Mark Ralston | AFP | Getty Images

The delinquency rate on U.S. home mortgages rose in the first quarter as more homeowners fell behind on payments for the first time, data from an industry group showed on Thursday.

The seasonally adjusted delinquency rate on all loans rose to 7.25 percent from 7.09 percent in the first quarter but was down from 7.40 percent a year ago, according to the report from the Mortgage Bankers Association.

The number of loans that were 30 days late on payments rose to 3.21 percent from 3.04 percent at the end of last year. Mortgages that were 90 days or more past due, which are considered less likely to get back on track, edged down to 2.88 percent from 2.89 percent.

Six years after its far-reaching collapse, the housing market started to turn the corner last year with prices rising, inventory tightening and low interest rates enticing some buyers.

"On the delinquency side, it's a small increase but we're back to precrisis levels. That number is just going to track what's happening in the job market," said Michael Fratantoni, MBA's vice president of research and economics.

Delinquency rates include mortgages that are at least one payment behind but have not yet entered the foreclosure process. Foreclosure inventory fell to 3.55 percent from 3.74 percent, while the number of loans starting the process held steady at 0.7 percent, the lowest level since the second quarter of 2007.

Among the different types of loans, subprime fixed and adjustable rate mortgages saw the largest increases in delinquencies, though there were fewer subprime loans sitting in the foreclosure process.

The two categories make up more than 10 percent of overall mortgages, the MBA said.

_ By Reuters