Delinquencies & Foreclosures Rise in 3Q

More home owners were late on their mortgage payments during the third quarter of this year than in the previous three months, according to a report by the Mortgage Bankers Association.

The rate of home loan delinquencies rose to 4.44 percent during the third quarter from 4.34 percent in the previous three months, but was down from 4.54 percent a year ago. Also, the rate of homes entering the foreclosure process rose to 0.41 percent, up from 0.40 percent in the third quarter of last year.

MBA warns that the effects of hurricanes Katrina, Rita, and Wilma will be reflected over at least the next few quarters. Although the group expects delinquencies and foreclosures to rise, the improving economy is likely to offset the increase.

"At the end of the day, the most important criteria are job growth and real income growth," says MBA Chief Economist Doug Duncan.

Source: Los Angeles Times (12/15/05)