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Record foreclosures for prime borrowers

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The foreclosure starts rate for borrowers with prime, fixed-rate mortgages set a new record high during the third quarter, the Mortgage Bankers Association said in releasing the results of its quarterly National Delinquency Survey.As the pool of subprime and prime adjustable-rate mortgage (ARM) loans continues to shrink, unemployment is the greatest threat to homeownership for the 78 percent of borrowers whose homes were purchased with prime, fixed-rate mortgages or FHA-guaranteed loans.While the survey showed some improvement in delinquency rates, they're likely to remain elevated until the unemployment picture improves, said Michael Fratantoni, MBA's vice president of research and economics.The delinquency rate for all mortgages on one- to four-unit homes fell to a seasonally adjusted 9.13 percent at the end of the third quarter, down from 9.85 percent in the second quarter and 9.64 percent a year ago. If the survey's results are extrapolated to an estimated 50 million outstanding U....