The number of foreclosures reached record numbers in the second quarter led by California, Florida, Nevada, and Arizona. According to data from a report issued by the Mortgage Bankers of Association, a record 0.65% of loans on one to four unit properties entered the foreclosure process in the second quarter of 2007. This represents the highest level in the surveys 55 year history.
The numbers were primarily driven by four states: California, Florida, Nevada, and Arizona. Outside of these four states, the foreclosure rate actually dropped across the country.
Doug Duncan, the chief economist of the Mortgage Bankers Association reported that:
“"Were it not for the increases in foreclosure starts in those four states, we would have seen a nationwide drop in the rate of foreclosure filings. Thirty-four states had decreases in their rates of new foreclosure and the increases were very modest in the states with increases, other than those four," Duncan said.”
Duncan also cited the differences in performance between fixed rate and adjustable rate loans:
"While the seriously delinquent rate for prime fixed loans was essentially unchanged from the first quarter of the year to the second, and the rate actually fell for subprime fixed- rate loans, that rate increased 36 basis points for prime ARM loans and 227 basis points for subprime loans."
California, Florida, Nevada, and Arizona account for more than one third of the country’s sub-prime ARMs and foreclosure starts on those ARMS.
Additional data from the survey showed that 1.4% of all loans were somewhere in the foreclosure process during the second quarter, up from .99% a year ago.
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