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New Foreclosures Up in 47 States

Thursday, September 6, 2007

The 2nd Quarter National Delinquency Survey, released today by the Mortgage Bankers Association (MBA), shows that mortgage loans entering foreclosure have increased in 47 states since this time last year. On average, the increases were 50% higher. Only four states-- North Dakota, South Dakota, Utah and Wyoming—did not experience increases in new foreclosures. Less than two percent of the American population lives in those states.

When releasing the survey today, the MBA downplayed new foreclosures by focusing only on changes between the last two quarters. "Any minor changes from one quarter to the next are largely meaningless—you have to look at the longer term picture," said Mike Calhoun, President of the Center for Responsible Lending. "The foreclosures occurring today are the worst they've been in at least 25 years. In essence, the MBA is saying, 'The house is on fire, but the temperature has dropped by three degrees in most rooms.'"

While foreclosures on all types of loans have increased in nearly all states, foreclosures in the subprime market are most severe. MBA's report shows that new foreclosures on subprime adjustable rate loans in 2nd quarter 2007 are 70 percent higher than the same time last year, compared with a 21 percent increase on prime fixed-rate loans.

Last December, the Center released comprehensive research on the performance of the subprime market that projects one out of five homeowners with a subprime loan will lose their home to foreclosure. That study, "Losing Ground: Foreclosures in the Subprime Market and Their Cost to Homeowners," is available here.

For more information: Kathleen Day, (202) 349-1871 or kathleen.day@responsiblelending.org; or Ginna Green, (510) 379-5513 or ginna.green@responsiblelending.org.