On Tuesday RealtyTrac released some pretty scary numbers relating to foreclosures. According to its data, RealtyTrac said, more than 176,000 people got foreclosure notices in May, an increase of 90 percent since the same month one year ago and the highest figure ever recorded in their monthly report.

The bad news made all of the network newscasts but we have always been a little leery of this particular source because RealtyTrac basically sells information on individual foreclosures to those interested in investing in the product. Information to non-subscribers on their website is limited. Nothing wrong with that; we would just like to have a little better understanding about the source of its information.

Results of the quarterly National Delinquency Survey conducted by the Mortgage Bankers Association (MBA) were released on Thursday and were much less alarmist than the RealtyTrac figures. Granted it is a different time line - RealtyTrac was talking about May activity while MBA's data was dealing with the first quarter of 2007 - a period that ended March 31. However, MBA's interpretation of its own data was reassuring.

First of all, the delinquency rate for mortgage loans on single family to four-family properties at the end of the quarter was 4.84 percent of all outstanding loans. This is a decrease of 11 basis points on a seasonally adjusted basis from the end of the fourth quarter in 2006 and an increase of 43 basis points from one year earlier. These are not loans in foreclosure - merely loans where the borrowers are not up-to-date on payments but not yet for a period long enough to have caused the loans to enter the foreclosure process. Based on the reported universe for MBA data, we estimate that about 2,130,000 households are currently delinquent on mortgage payments.

The rate of loans actually going into foreclosure (which we assume would correspond to RealtyTrac's "people (who) got foreclosure notices") was 0.58 percent, up four basis points from quarter four of 2006 when seasonally adjusted, and 17 basis points higher than one year ago. Again, based on the reported MBA universe, this would mean approximately 255,000 households receiving notice of legal action over a three month period or about 85,000 per month.

According to Doug Duncan, MBA's Chief Economist and Senior Vice President of Research and Business Development, the data is being driven by circumstances in seven states. "The percentage of loans in foreclosure would be well below the average of the last ten years were it not for Ohio, Michigan, and Indiana, and the rate of foreclosures started nationwide would have fallen were it not for the big jumps in California, Florida, Nevada, and Arizona."

Foreclosure starts set a record but most of the increase was due to events in California, Florida, Nevada, and Arizona. "Without these four states, foreclosure starts would have declined," Duncan said. In fact, 24 states did see a decline in starts. Duncan blamed a portion of the foreclosure starts in the four states on speculators who are walking away from properties in the face of declining prices and interest rate resets. The chaos in Florida's homeowner insurance market is also contributing to the problem.

Since the fourth quarter of 2006 the delinquency rate for prime loans increased from 2.57 to 2.58 percent but the rate for subprime loans decreased substantially, from 13.46 percent to 12.15 percent. VA loan delinquencies also declined 33 basis points.

ARM delinquencies increased from 3.39 percent to 3.69 in the first quarter for prime loans and from 14.44 percent to 15.75 for subprime ARMs. Prime fixed-rate loans had delinquency rate 8 basis points lower than in the previous quarter (2.19 percent) while subprime loans increased from 10.09 percent to 10.25 percent.

New foreclosures went up 1 basis point to one-quarter of one percent for prime loans and 43 basis points for subprime loans, from 2 percent to 2.43 percent. VA loans increased from 0.34 percent to 0.41 percent while FHA loans decreased three basis points to 0.9 percent.

Seriously delinquent loans, i.e. those that are 90 or more days delinquent or have entered the foreclosure process totally 2.23 percent of outstanding loans compared to 2.21 percent in the fourth quarter of 2006.

Compared to the first quarter of 2006, the delinquency rate for prime and subprime loans were up 33 and 227 basis points respectively but was down 8 basis points for FHA and 44 basis points for VA loans. New foreclosures were up 9 basis points for prime loans and 81 basis points for subprime loans.

The MBA data covers approximately 44 million loans, about 80 percent of all first lien residential one to four family mortgage loans in the U.S. Data was collected from approximately 130 lenders including mortgage bankers, commercial banks, and thrifts.