Picture a neighborhood of 300 houses. Take an aerial snapshot in your mind — 20 houses to a block, 15 blocks. Those 300 dwellings represent all the mortgaged houses in the United States.

  • Ten of the houses were in foreclosure at the end of 2008.
  • Another 24 were at least 30 days past due on the monthly payments, but not in foreclosure.

The housing situation at the end of 2008 was worse than it had been three months earlier, at the end of September. Back then, nine houses in that mythical 300-house neighborhood had been in foreclosure. From October to the end of December, two of those foreclosed houses were sold — and three more went into foreclosure. The foreclosure bucket, as housing economists say, is filling up.  

There wasn’t much encouraging news in the Mortgage Bankers Association’s quarterly delinquency survey. A mortgage is counted as delinquent when the payment is 30 or more days past due. Fewer subprime adjustable-rate mortgages went into foreclosure. That sounds encouraging, but the decline reflects the fact that lenders virtually stopped underwriting subprime ARMs in early 2007. Noting that fewer subprime ARMs are going into foreclosure is like observing that fewer Studebakers are going to the junkyard.

Foreclosure starts leveled off in the fourth quarter compared with the previous quarter, says Jay Brinkmann, the Mortgage Bankers Association’s chief economist. “While on the surface this might seem like good news for the mortgage market, it is misleading,” Brinkmann says, because several states and mortgage companies halted new foreclosures toward the end of the year.

Partly as a result of those moratoriums, there was a jump in loans that were at least 90 days past due, but not in foreclosure.

Brinkmann says delinquencies and foreclosures started rising a couple of years ago because people couldn’t afford their monthly payments after the rates on their adjustable-rate mortgages went up. Payment shock is still an issue, and so is overbuilding in former boom states. But now, “employment is the issue,” Brinkmann says. As people lose jobs, they fall behind on the house payments.

The Obama administration’s housing rescue plan “will be beneficial,” Brinkmann says, but “it’s difficult to quantify it.”

Among the quarterly delinquency reports lowlights:

  • The national delinquency rate, the percentage of mortgage homes with payments at least 30 days past due, but not in foreclosure, was 7.88 percent, and 3.3 percent were in foreclosure.
  • In Mississippi, about 2 in 15 (or 13.11 percent) of mortgages were at least 30 days past due, but not in foreclosure. In Nevada and Florida, the rate was 1 in 9.
  • In Florida, an eye-popping 1 in 11 mortgaged homes (8.95 percent) was in foreclosure at the end of the year. Nevada and Arizona were next, with foreclosure inventories of 6.58 percent and 4.64 percent, respectively.
  • To pick on Florida again: One in five mortgaged homes in the Sunshine State was either in foreclosure or at least a month late on the payments. If that mythical 300-house neighborhood represented Florida and not the nation, 27 would have been in foreclosure at the end of the year, and another 33 would have been at least 30 days late, but not in foreclosure.

Here are figures for the five most populous states:

  • California: 9.13 percent of mortgages were delinquent, 4.19 percent were in foreclosure, and 8.28 percent were either in foreclosure or more than 90 days past due.
  • Texas: 9.01 percent of mortgages were delinquent, 1.5 percent were in foreclosure, and 4.28 percent were either in foreclosure or more than 90 days past due.
  • New York: 7.58 percent of mortgages were delinquent, 2.61 percent were in foreclosure, and 5.1 percent were either in foreclosure or more than 90 days past due.
  • Florida: 11.09 percent of mortgages were delinquent, 8.95 percent were in foreclosure, and 13.32 percent were either in foreclosure or more than 90 days past due.
  • Illinois: 8.39 percent of mortgages were delinquent, 3.87 percent were in foreclosure, and 6.63 percent were either in foreclosure or more than 90 days past due.

Highlights:

  • Nine states had delinquency rates under 6 percent: North Dakota (3.56 percent), Alaska (3.81), South Dakota (3.97), Wyoming (4.09), Oregon (5.1), Washington (5.1), Hawaii (5.29), Vermont (5.3) and Colorado (5.61).
  • Four states had fewer than 1 percent of homes in foreclosure: Wyoming (0.72 percent), North Dakota (0.85), Alaska (0.9) and Montana (0.97).