Home Foreclosures Hit Record in First Quarter The rate of U.S. home loans entering the foreclosure process rose to a record level in the first quarter of 2007, while late payments fell from the previous quarter, an industry trade group said on Thursday. The Mortgage Bankers' Association said the rate of loans entering the foreclosure process was 0.58 percent on a seasonally adjusted basis, or more than one out of 200 loans and 4 basis points higher than the previous quarter. The rate rose 17 basis points from a year ago. The delinquency rate for mortgage loans on one-to four-unit residential properties stood at 4.84 percent of all loans outstanding in the first quarter on a seasonally adjusted basis, down 11 basis points from the fourth quarter and up 43 basis points from a year ago, according to the MBA's National Delinquency Survey. "The rate of delinquencies is being driven by what is taking place in seven states," Douglas Duncan, the MBA's chief economist, said in a statement. "The percentage of loans in foreclosure would be well below the average of the last 10 years were it not for Ohio, Michigan and Indiana, and the rate of foreclosures started nationwide would have fallen were it not for the big jumps in California, Florida, Nevada and Arizona. "Those states have special circumstances that do not reflect what is happening in the rest of the country," he said. However, while attempting to put the best spin possible on these sad cases, each one of which is a personal tragedy, there are estimated to millions of home-owners just one missed payday away from deep financial trouble. In my (Alan Franklin's) opinion the housing problems are set to get a lot worse. The delinquency rate does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process was 1.28 percent of all loans outstanding at the end of the first quarter, an increase of 9 basis points from the fourth quarter of 2006 and 30 basis points from one year ago. During the housing market's record five-year run, California, Florida, Nevada, and Arizona were some of the hottest real estate markets and favorites among investors. But, these speculative buyers are now leaving those once popular markets in droves. Many of them were subprime borrowers with adjustable-rate mortgages, which are now resetting at higher interest rates. The subprime mortgage market caters to borrowers with poor credit histories.