MORTGAGE CHECKS COME IN ON TIME DELINQUENCY RATE AT 4.95% FOR STATE.

Byline: GREGORY J. WILCOX

Staff Writer

Despite a spike in foreclosures late last year, Californians are still keeping up with their monthly mortgage payments, the Mortgage Bankers Association said Tuesday.

Nearly 4.95 percent of all home mortgages in the annual survey were delinquent -- 30 or more days past due -- in the fourth quarter. This, in part, has been fueled by lending to high-risk borrowers with weak, or subprime, credit.

When compared with other states, California ranked 43rd in delinquencies with a rate of 0.43 percent, and 40th in foreclosures with a rate of 0.58 percent, the association said.

Mississippi had the highest delinquency rate at 10.64 percent and Ohio had the highest foreclosure rate, 3.38 percent.

"The market is working, culling overcapacity from the industry. Far from being a problem, these clear and effective market signals and actions will help the market to more efficiently regain its equilibrium," Doug Duncan, the association's chief economist and senior vice president of research and business development, said in a statement.

However, the Associated Press reported Tuesday that Congress is eyeing tougher standards for risky, higher-interest home loans made to people with blemished credit records in response to the default activity surge.

Some analysts and executives said lawmakers and regulators missed earlier opportunities to scrutinize the mortgage industry, and they worry that a belated overreaction could make matters worse by choking off funds to the poor and further weakening the housing market.

Lawmakers "did nothing while the industry created this problem," said Christopher Whalen, a New York-based managing director for Institutional Risk Analytics, which analyzes the risk level of companies.

California, the nation's biggest residential real estate market, is mired in a slump that dates back to the 2005 fourth quarter. Sales plunged last year and appreciation rates shrank into single digits.

And while foreclosure activity here also spiked, it is just now approaching average levels, according to market tracker DataQuick Information Systems.

Foreclosure activity soared an annual 145.3 percent across California during last year's fourth quarter to its highest level since 1998, but still remained below average, the company said.

"Most of that big jump is because the year-ago numbers were unnaturally low," DataQuick analyst John Karevoll said at the time. "We're jumping up, but we are nowhere near even the average, not to mention the severe problem we had back in the early 1990s."

During the last three months of 2006, the DataQuick report showed that 7,445 property owners in Los Angeles County received foreclosure notices, up an annual 113.9 percent. The peak was 21,444 notices in the first quarter of 1996.

About 2.03 percent of subprime mortgages in California entered foreclosure, which is more than the 1.83 percent of loans that were already in foreclosure during the third quarter. Homes typically stay in foreclosure for several months.

Around the country, states such as Massachusetts, Colorado, Georgia and Texas also had high and rising foreclosure rates. The state statistics are not seasonally adjusted, unlike the national data.

Daily News wire services contributed to this report.

greg.wilcox(at)dailynews.com

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