The number of mortgages, especially prime fixed loans, increased to record levels during the fourth quarter of 2010 according to a report released Thursday by the Mortgage Bankers Association.
But loans in foreclosure increased to 4.63 percent during the quarter, up from 4.39 percent in the third quarter and tying a record set in the first quarter of 2010.
The foreclosure rate for prime fixed loans, which make up 63 percent of all mortgages, increased to 2.67 percent — the highest since the association started the survey in 1953. Foreclosure actions were started on 1.27 percent of mortgages in the final quarter of the year, compared to 1.34 percent in the third quarter.
While the percentage of mortgages in foreclosure climbed, the number of delinquent loans was at the lowest level in two years in the quarter. The delinquency rate for loans on one-to-four-unit residential properties was 8.22 percent.
Property seizures plunged at the end of 2010 as lenders such as Bank of America Corp. and JPMorgan Chase & Co. temporarily halted proceedings to review their handling of court documents. That left more homes in the foreclosure process with their status unresolved.
Repossessions tumbled 32 percent in the fourth quarter from the prior period, according to data from RealtyTrac Inc. in Irvine, Calif.
“It’s clear that the process issues were driving the increase,” Jay Brinkmann, chief economist of the Washington- based Mortgage Bankers Association, said in an interview. “We would expect the foreclosure inventory to start coming down as that gets resolved and the court situations get cleared up.”
Bloomberg contributed to this article.