It might not be surprising, but it surely is not good.

The delinquency rate for mortgage loans on one-to-four-unit residential properties was 4.70 percent at the end of the fourth quarter, up from 4.38 percent in the fourth quarter of 2004 and 4.44 percent in the third quarter of 2005, according to the fourth quarter 2005 National Delinquency Survey (NDS) released today by the Mortgage Bankers Association (MBA). This quarter’s NDS results cover over 41.2 million loans (31.1 million prime loans, 5.5 million subprime loans and 4.6 million government loans).
The percentage of loans in the foreclosure process was 0.99 percent at the end of the fourth quarter, a drop of 16 basis points from the previous year and an increase of 2 basis points from the third quarter of 2005. The seasonally adjusted (SA) rate of loans entering the foreclosure process was 0.42 percent in the fourth quarter, down 4 basis points from the previous year and up 1 basis point from the previous quarter.

“The increase in delinquencies is not surprising,” said Doug Duncan, MBA’s chief economist and senior vice president. “We have been expecting an up-tick in delinquencies due to a number of factors: the seasoning of the loan portfolio, the increased shares of the portfolio that are ARMs and subprime mortgages, as well as the elevated level of energy prices and rising interest rates.”