WASHINGTON : US housing woes deepened in recent months as late payments and foreclosure proceedings rose, a mortgage industry survey showed Thursday. The Mortgage Bankers Association, which represents banks and other firms in real estate finance, said delinquencies rose in the second quarter to 5.12 percent of loans on one-to-four-unit residential properties, up from 4.84 percent in the prior quarter.
The delinquency rate does not count another 1.4 percent of loans in the foreclosure process in the April-June period, also up from the first quarter.
Moreover, an additional 0.65 percent of loans entered the foreclosure process, the highest in the history of the survey.
The problems stem from the downturn in housing after a years-long bubble in which lenders and borrowers rushed to cash in on rising home prices.
In many cases, adjustable-rate mortgages (ARMs), designed to help borrowers buy properties they might not otherwise afford, are being reset to reflect higher market rates, raising the monthly payments for home buyers.
Some analysts say the problems are not yet over and that more than two million homeowners may face foreclosure in the near future.
"The housing adjustment is still on track and we don't expect any recovery in 2008: excess supply is very large and 2008 reset wave suggests further downward adjustment in housing prices," said Nathalie Dezeure, economist at Nataxis.
"Tightening in credit conditions won't help. The housing crisis will continue to weigh on (economic) growth in 2008. - AFP /ls
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