A total of 14.01 percent of outstanding mortgages were at least one payment overdue or in foreclosure at the end of March, the Mortgage Bankers Association said today — an astounding number in a normal economy, but an improvement from 15.02 percent at the end of December.

Seasonal factors may account for some or all of the improvement, however. The non-seasonally adjusted delinquency rate decreased from 10.44 percent in the fourth quarter of 2009 to 9.38 percent in the first quarter.

After accounting for seasonal factors, the delinquency rate for mortgages on one- to four-unit properties stood at 10.06 percent, up from 9.47 percent at the end of 2009 and 9.12 percent a year ago.

"The issue this quarter is that the seasonally adjusted delinquency rates went up while the unadjusted rates went down," said MBA Chief Economist Jay Brinkmann.

Delinquency rates traditionally peak in the fourth quarter and fall in the first quarter, he said, and the question is whether the drop represents anything more than a normal seasonal decline or a more fundamental improvement.

Given the difficulties in interpreting the true seasonal effects, it is important to highlight the year-over-year changes, the MBA said in a press release.

A record high 4.63 percent of outstanding mortgages were at some state in the foreclosure process at the end of the first quarter, up from 4.58 percent at the end of the year and 3.85 percent a year ago.

At 1.23 percent, the foreclosure start rate — the percentage of loans on which foreclosure actions were started — was up from 1.2 percent at the end of the fourth quarter but down from 1.37 percent a year ago.

Looking back a year, the foreclosure start rate was up in about half of states, with the largest increases coming in Oregon, North Carolina and Maryland. The largest decreases were in Florida, Rhode Island and California.

Almost all of the states saw year-over year decreases in subprime ARM foreclosure starts, while almost all had increases in prime fixed-rate and FHA foreclosure starts.

In a separate report, the MBA said demand for purchase mortgages was down 24 percent from a year ago during the week ending May 14, to levels not seen since 1997.

Although rates on 30-year fixed-rate mortgages decreased to 4.83 percent — the lowest since November 2009 — it’s likely that the federal homebuyer tax credit pulled sales into April at the expense of the remainder of the spring buying season, the group said.


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