Rate of Mortgage Delinquencies Rises

Wall Street Journal (04/10/08) P. D3; Simon, Ruth
Mortgage delinquencies of 30 days or more rose to 4.46 percent of loans in the first quarter from 3.98 percent in the fourth quarter and 2.92 percent in the 2007 first quarter, according to Equifax and Moody's Economy.com, with Florida and Nevada posting delinquency rates of 7.03 percent and 6.59 percent, respectively. The report also shows a jump in the foreclosure rate to 1.39 percent in the first quarter from 1.08 percent in the fourth quarter and 0.58 percent in the first quarter of 2007. Home-price declines and unemployment are becoming bigger problems than rising interest rates; Deutsche Bank reports that of borrowers with subprime adjustable-rate mortgages, 22 percent watched their monthly payments rise no more than $100 and 18 percent saw their payments stay the same. Illness, death in the family and other extenuating circumstances were responsible for late mortgage payments for only 10 percent of the more than 1,900 households counseled by the nonprofit Neighborhood Housing Services of Chicago, with unaffordable loans affecting 37 percent of borrowers. Jay Brinkmann, a vice president of the Mortgage Bankers Association, says rising delinquencies and defaults are anticipated, adding that lenders reportedly are "bending over backwards" to assist struggling borrowers.