The rate of failing loans swelled across most mortgage types but was led by a growing wave of subprime borrowers unable to make payments, the trade group said in its delinquency and foreclosure survey.
WASHINGTON (Reuters) - U.S. home foreclosures and the rate of homes entering the foreclosure process rose to record highs in the fourth quarter, led by failing subprime loans, the Mortgage Bankers Association said on Thursday.
The rate of failing loans swelled across most mortgage types but was led by a growing wave of subprime borrowers unable to make payments, the trade group said in its delinquency and foreclosure survey.
A record 0.83 percent of U.S. loans were entering the foreclosure process in the last three months of 2007 compared with 0.54 percent in the same time a year earlier.
The U.S. mortgage delinquency rate of 5.82 percent was the highest since 1985 and up from the 4.95 percent seen in the fourth quarter of 2006.
!ADVERTISEMENT!For subprime mortgage loans, the delinquency rate rose a full percentage point to 17.31 percent from the previous quarter. The easy terms of subprime loans drew many borrowers with shaky credit, and those failing mortgages have stoked anxiety in credit markets worldwide.
Wall Street and policy-makers have worried that foreclosures will grow when many subprime loans face a built-in interest rate reset in coming months. But MBA's chief economist, Doug Duncan, blamed the current spree of failing loans on poor credit quality of the borrower rather than a rate spike.
"The current delinquencies are due to credit quality rather than resets," he said.
(Reporting by Patrick Rucker; Editing by Kenneth Barry)
