The Pace of Mortgage Delinquencies Speeds Up

Even as federal and state governments come under growing pressure to respond to the mortgage crisis, new data show that the pace at which mortgages are going delinquent is speeding up.

A new report by Equifax, the credit bureau, and Moody’s Economy.com shows that 4.46% of mortgages were at least 30 days past due at the end of the first quarter, up from 3.98% in the fourth quarter and up 2.92% a year earlier. Delinquencies in the first quarter varied sharply by state, but were highest in Puerto Rico (8.03%), Florida (7.03%) and Nevada (6.59%.)

The foreclosure rate, meanwhile, jumped to 1.39%, from 1.08% at the end of last year and 0.58% a year earlier. The increases in mortgage delinquencies and foreclosures were the biggest since at least 2000, when the firms began collecting these data. A report released Wednesday by UBS AG suggests that foreclosures won’t peak until the middle of next year.

The latest increases in delinquencies are being driven in part by falling home prices and rising unemployment. The U.S. economy lost 80,000 jobs last month, according to the Labor Department, the biggest drop in five years. Meanwhile, some 8.8 million borrowers had mortgages that exceeded the value of their homes in the first quarter, with the number expected to increase to 10.6 million in the second quarter, according to Moody’s Economy.com. “It’s an incredibly bad mix that is causing foreclosures to go skyward,” says Mark Zandi, chief economist of Moody’s Economy.com. Mr. Zandi is serving as an unpaid economic adviser to Republican Sen. John McCain. (See full story “Rate of Mortgage Delinquencies Rises“) –Ruth Simon