New foreclosures begin to pick up pace

Joe Raedle / Getty Images

Renzo Salazar, from Real Signs of Ace Post Holding Inc., places a bank owned sign on top of a for sale sign in front of a foreclosed home on November 10, 2011 in Miami, Florida.

By John W. Schoen, Senior Producer

The pace of new home foreclosures edged up again in the third quarter even as the number of borrowers falling behind on their payment eased a bit, according to the latest industry data released Thursday.

Borrowers with subprime adjustable mortgages saw the biggest jump in new foreclosures. Some 4.65 percent of those subprime loans entered the foreclosure pipeline ? up from 3.62 percent in the second quarter, a 28 percent increase, according to the Mortgage Bankers Association.

The MBA said the rise was due in part to an increase in the number of loans that failed to get lender approval for a modification. Some states also ended their moratoriums on foreclosures during the quarter. ??

?The increase in foreclosure starts was driven by large increases from just a few servicers concentrated in certain ?hardest hit? states," said Michael Fratantoni, MBA's vice president of research and economics.

Those hardest hit included Florida, Rhode Island, Arizona and Nevada.

Overall, the pace of new foreclosures for all loans edged up to 1.08 percent in the third quarter from 0.96 percent in the prior three month period. That?s down from 1.34 percent?a year before.

The delinquency rate on U.S. home mortgages -? the number of borrowers who have fallen behind on their payments -- fell in the third quarter to the lowest level in nearly three years. For all loans, the rate fell to 7.99 percent from 8.44 percent in the second quarter. That?s down from 9.13 percent a year ago and the lowest level since the fourth quarter of 2008.

"That's really just reflecting the modest improvement we've seen in the economy broadly and the job market in particular," said Fratantoni.?"Job growth is not what we want it to be, but it's been good enough to keep the unemployment rate at least level and that's been beneficial here with fewer people falling behind."

The number of loans already in the?foreclosure process at the end of the third quarter was unchanged from the previous quarter at 4.43 percent, and up slightly from 4.39 percent a year ago.

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CNBC's Steve Liesman shares highlights of his interview with Alan Kreuger, the new Council of Economic Advisers chairman, on America's housing crisis.

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Source: http://bottomline.msnbc.msn.com/_news/2011/11/17/8858067-new-foreclosures-begin-to-pick-up-pace

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