MercoPress. South Atlantic News Agency

Home foreclosures in the US set new record in first quarter of 08

United States home foreclosures and late payments set records over the first three months of the year and are expected to keep rising, stark signs of the housing crisis' mounting damage to homeowners and the US economy.

The latest snapshot of the mortgage market showed that the proportion of mortgages that fell into foreclosure soared to 0.99% in the January-through-March period. That surpassed the previous high of 0.83% over the last three months in 2007. The report by the US Mortgage Bankers Association also found that more homeowners slipped behind on their monthly payments. The delinquency rate jumped to 6.35% in the first quarter, compared with 5.82% for the three months earlier. Payments are considered delinquent if they are 30 or more days past due. Both the rate of new foreclosures and late payments were the highest on record going back to 1979. Jay Brinkmann, the association's vice president of research and economics, told The Associated Press that the slump in house prices are the biggest factor for rising foreclosures and late payments. With prices expected to keep dropping, foreclosures and late payments "are going to continue to go up" in the months ahead, he said. Homeowners with tarnished credit who have subprime adjustable-rate loans took the hardest hits. Foreclosures and late payments for these borrowers also swelled to all-time highs in the first quarter. The percentage of subprime adjustable-rate mortgages that started the foreclosure process climbed to 6.35%. The rate was 5.29% in fourth quarter, the previous high. Late payments rose to 22.07% from 20.02%, the previous high. "The number one problem is the drop in home prices," Brinkmann said. Declining prices "are hurting people's ability to recover when they run into trouble" he said. (AP).-