Mortgage delinquency rises in N.H.

While delinquency rates on residential mortgages in New Hampshire rose during the fourth quarter of 2006, they remained below the national average and were the third-lowest in New England, according to the most recent National Delinquency Survey of the Mortgage Bankers Association of America.

Total mortgage delinquencies in New Hampshire increased by 48 basis points to 4.37 percent in fourth quarter 2006, up from 3.89 percent in the third quarter of 2006.

Some 188,313 loans were serviced in the Granite State during fourth quarter 2006, up 1.5 percent from the previous quarter. Of those, 158,167, or 84 percent, were prime loans while 23,358, or 12 percent, were subprime. FHA and VA loans made up the remaining 4 percent.

Despite the increase in mortgage delinquencies, New Hampshire remains below the national rate of 4.95 percent delinquency rate and behind the New England average of 4.46 percent.

While all four major loan types saw increases in delinquencies during the fourth quarter, increases in subprime loan delinquencies – those bearing high interest rates and given to borrowers with poor credit histories – were the most notable in New Hampshire and across the nation.

Mortgage delinquencies on subprime loans in New Hampshire increased by 156 basis points to 14.45 percent during the fourth quarter of 2006, up from 12.89 percent during the third quarter. Third-quarter numbers reflected a 114-basis point jump.

At the national level, delinquencies on subprime loans increased by 77 basis points to 13.33 percent during the fourth quarter.

Nationally, foreclosures on subprime loans during the fourth quarter were 3.74 percent, up 7 basis points from the previous quarter.

“Increases in delinquency and foreclosure rates were noticeably larger for subprime loans,” said Doug Duncan, MBA’s chief economist and senior vice president of research and business development. “Subprime borrowers are more likely to be susceptible to the cumulative increases in interest rates that we have experienced and the resultant nationwide slowing of home price appreciation including outright declines in some markets,”

Delinquencies on prime loans were at 2.63 percent, up 34 basis points from the 2.29 percent reported for third quarter 2006. Foreclosures on prime loans during the fourth quarter were 0.31 percent, up slightly from the 0.28 percent reported in third quarter.

Delinquencies on FHA loans increased by 83 basis points to 12.10 percent during the fourth quarter of 2006, up from 11.27 percent in the third quarter.

Delinquencies on VA loans were up 66 basis points to 6.97 percent, compared to 6.31 percent in the third quarter.

Delinquencies on prime loans were 2.63 percent, up 34 basis points from the third quarter. – TRACIE STONE