BY BILL FREEHLING
The number of homes that started the foreclosure process dropped in Virginia during the third quarter from the three months before, according to data released yesterday by the Mortgage Bankers Association.
Virginia foreclosure starts dropped from 11,425 in the second quarter to 10,802 in the three months ending Sept. 30--a 5.5 percent decline. Nationwide, foreclosure starts dropped about 0.8 percent in the third quarter to 575,204.
MBA Chief Economist Jay Brinkmann cautioned people from reading too much into the improvement, however. He said on a conference call yesterday that his "enthusiasm was tempered" by the fact that the number of mortgages more than 90 days past due is growing.
"There is a mixed picture," Brinkmann said.
Alaska was the only state where there were fewer homes in the 90-days-plus delinquent category in the third quarter from the three months before. Brinkmann attributed it to mortgage companies becoming increasingly likely to work out loans rather than going to the foreclosure process. The federal government has encouraged the lenders to do so.
In Virginia, 1.6 percent of mortgage loans were 90 days or more delinquent at the end of the third quarter, according to the MBA. The foreclosure rate was 1.5 percent. Both figures were better than the national data, which show that 3 percent of loans were in the foreclosure process in the third quarter. California and Florida continue to be the hardest-hit.
Virginia's lower-than-average foreclosure rate may have much to do with its relatively low unemployment rate. The state's jobless rate was 4.2 percent in October, about 2 percentage points below the U.S. rate.
Brinkmann noted yesterday that foreclosures in 2009 would have likely declined without the recession. But with job losses mounting, it's tough to predict when the tide will be stemmed. He noted that many of the more-recent layoffs have been of college-educated workers who are more likely to own homes.
The MBA data don't go down to the local level. But the New York Federal Reserve bank has calculated local mortgage delinquency data as of the end of the second quarter. It's available at Fredericksburg.com/blogs/bizbrowser.
The percentage of Fredericksburg-area delinquent mortgages is higher than the statewide number, according to the data. The bulk of the state's foreclosure problems have occurred in Northern Virginia, with Prince William County getting the worst of the situation.
The number of mortgages that were 90 days or more delinquent at the end of the second quarter ranged between about 2 percent and 3 percent in most Fredericksburg-area localities. Those were up about a percentage point from the year before.
Bill Freehling: 540/374-5405
Email: bfreehling@freelancestar.com