Mortgage delinquencies for U.S. homes in the third quarter of 2008 rose to 6.99% from the previous quarter to 6.41% of all loans outstanding, marking a new record 29-year high, according to the Mortgage Bankers Association's (MBA) National Delinquency Survey released Friday.

From one year ago, delinquency rates - which measure mortgages that have at least one payment overdue - have risen 128 basis points.

This is the highest rate ever recorded in the index, which began in 1979. Last month's index revealed a previous high as well; before that, the all-time high was 6.07% in 1985.

Total foreclosures rose to a record high at 2.97% in the third quarter, up from 2.75% in the previous quarter and 1.69% in Q3 2007.

"In the last quarter we saw about 575,000 foreclosure actions started, compared with an estimated 580,000 in the second quarter and 535,000 in the first quarter," said Jay Brinkmann, MBA chief economist. "At this rate we are looking at finishing 2008 at about 2.2 million foreclosure actions started."

Brinkmann added that the outlook for the housing market will be worse given the effects of job losses and general economic deterioration.

New foreclosure starts reached 1.07% compared to 1.08% in the previous quarter and 0.78% a year ago. Starts from subprime loans fell to 4.23% in the quarter, down from 4.26% in the previous quarter.

The total rate of delinquencies for prime rates rose to 4.34% from 3.93% in the previous quarter. One year ago, the rate was 3.12%.

The total rate of delinquencies for subprime rates grew to 20.03% from 18.67% in the previous quarter. One year ago, the rate was 16.31%.

The MBA report is based on a sample of more than 44 million mortgage loans serviced by mortgage companies, commercial banks, thrifts, credit unions and others in the mortgage lending field.

By Steve Stecyk and edited by Sarah Sussman
©CEP News Ltd. 2008