The Mortgage Bankers Association reported that mortgage delinquencies rose to 4.7 percent during the third quarter–up from a revised 4.4 percent in the second quarter–after two consecutive quarters of decline. The delinquency rate for subprime borrowers rose to 12.6 percent, from 11.7 percent during the second quarter; and the pace of delinquencies for subprime homeowners with adjustable-rate mortgages increased to 13.2 percent from 12.2 percent. MBA chief economist Doug Duncan expects there to be a “modest increase” in delinquencies and foreclosures in the quarters to come “as the housing market bottoms.” As much as $1.5 trillion of residential debt, in the form of ARMs, could reset in 2007, according to Duncan.

Bob Roscoe, Mortgage Marketing Associates, Minneapolis, Minnesota
Mortgage Delinquencies Fact and Fiction