The Leadership Conference on Civil and Human Rights

New Mortgage Bankers Association (MBA) data released yesterday shows that foreclosure rates and delinquency rates, or the rate of people who are at least one payment behind in their mortgages but not in foreclosure, increased in the first three months of 2009, even for homeowners with prime loans. 

According to the MBA, there are more prime fixed-rate loans than other types of loans among new foreclosures for the first time since the rise in subprime lending.  Generally, only borrowers with good credit qualify for prime loans.

The delinquency rate for homeowners with prime loans increased to a little more than 6 percent.  In addition, the percentage of loans in the foreclosure process doubled in the last year.  The combined percentage of delinquent loans and loans in foreclosure was about 12 percent, the highest ever recorded by the MBA.

Despite rising delinquency and foreclosure rates, the MBA lobbied aggressively to block an amendment to a foreclosure prevention bill in Congress that would have given bankruptcy judges the ability to rework defaulted home mortgages on family homes to an affordable value. 

Without the amendment, the bill that was passed last week will not help as many homeowners as it could have.  According to estimates by the Center for Responsible Lending and the National Association of Consumer Bankruptcy Attorneys, the change to bankruptcy law could have prevented up to 1.7 million mortgages from falling into foreclosure.