US foreclosures accelerated to the fastest pace in almost three decades during the second quarter as interest rates increased and home values fell, prompting more Americans to walk away from homes they couldn't refinance or sell.
New foreclosures increased to 1.19 per cent, rising above 1 per cent for the first time in the survey's 29 years, the Mortgage Bankers Association (MBA) said in a report yesterday. The total inventory of homes in foreclosure reached 2.75 per cent, almost tripling since the five-year housing boom ended in 2005. The share of loans with one or more payments overdue rose to a seasonally adjusted 6.41 per cent of all mortgages, an all-time high, from 6.35 per cent in the first quarter.
A record 1.2 million homes were in foreclosure during the second quarter of 2008. That represents 2.8 per cent of all outstanding loans, up from 1.4 per cent of all loans during the same period a year ago, according to the MBA.
And 490,000 of the 45 million home mortgages serviced by MBA members began new foreclosure proceedings. That's up 9 per cent from the 448,000 starts recorded in the previous quarter, and marked the seventh straight quarter that foreclosure starts increased.
The delinquency rate, which measures mortgages that aren't in foreclosure but have missed least one payment, also hit a record high. During the three months ended 30 June, 2.9 million homeowners, or 6.4 per cent, were behind on their payments, up more than 25 per cent from last year.
The MBA has been tracking foreclosure and delinquency data since 1979.
"The national foreclosure numbers continue to be driven by the hardest hit states that are continuing to get much worse," said Jay Brinkmann, MBA's Chief Economist. "The increases in foreclosures in California and Florida overwhelmed improvements in states like Texas, Massachusetts and Maryland."