LOS ANGELES - The U.S. mortgage delinquency rate increased for the first time in a year as slowing economic growth left more borrowers struggling to pay their bills.
The share of home loans at least 30-days late rose to 7.58 percent in the second quarter on a seasonally adjusted basis, up from 7.4 percent in the previous three months, the Mortgage Bankers Association said in a report today. The rate for seriously delinquent loans, those more than 90 days behind, climbed to a seasonally adjusted 3.19 percent from 3.06 percent.
“It’s the first time it’s really picked up,” Michael Fratantoni, vice president of research and economics, said in a telephone interview today from Washington. “It’s reflecting weak job growth in the second quarter.”
An extended economic slowdown may spur more foreclosures and temper a housing recovery at a time when home prices are showing signs of a bottom. Gross domestic product grew at a 1.5 percent annual pace in the second quarter, compared with a 2 percent rate in the previous three months. The unemployment rate rose to 8.3 percent in July from 8.2 percent in June.
The non-seasonally adjusted delinquency rate jumped to 7.35 percent from 6.94 percent. Late payments tend to increase in the second quarter from the first, the banking group said. The adjusted rate was 8.44 percent a year earlier.
Lenders started foreclosure actions, defined as letters from attorneys, on 0.96 percent of mortgages in the second quarter, unchanged from the first quarter and a year earlier, the bankers group reported. About 4.27 percent of all loans were in the foreclosure process, down from 4.39 percent in the first quarter and 4.43 percent in the second quarter of 2011. Mortgage servicers slowed the pace of foreclosures in the fourth quarter of 2010, when they faced allegations of using improper and fraudulent paperwork to repossess homes with delinquent mortgages.
The five largest servicers, including Bank of America Corp. and JPMorgan Chase & Co., reached a $25 billion settlement with state and federal regulators in February.
States where home repossessions require judicial approval had the largest backlog of homes in the foreclosure pipeline, led by Florida, New Jersey, Illinois and New York. Maryland, another judicial foreclosure state, had the largest increase in foreclosure starts.