Defaults Rise to New Record.

Byline: Ted Cornwell

Washington-With delinquencies and foreclosures reaching new record highs in the second quarter, the industry remains mired in the worst downturn since at least the Great Depression.

The Mortgage Bankers Association quarterly survey found that 6.41% of homeowners were 30 or more days past due in the second quarter. When you add the 2.75% of borrowers who are in foreclosure to the mix, over 9% of homeowners are now past due or in foreclosure.

The overall delinquency rate is up 129 basis points from one year earlier. The foreclosure inventory is up 135 basis points. However, compared with the first quarter of this year, the delinquency rate rose by a modest six basis points. The foreclosure inventory was up 28 basis points.

Jay Brinkmann, the MBA's new chief economist, says it is an interesting time to be taking the leadership role in the trade association's economics department.

"I assure you, I look forward to a time when it's less interesting," he told reporters during a conference call to discuss the delinquency numbers.

There is something of a silver lining in the second-quarter numbers. The number of loans entering the 30-day delinquency category is "relatively benign," Mr. Brinkmann said. The problem is that an increasing number of loans that are already delinquent are rolling over to more serious categories of delinquency or default rather than curing.