WASHINGTON (Inman News Features) - The share of homeowners paying their mortgages late and the percentage of mortgages in the foreclosure process increased in the third quarter, according to a national delinquency survey conducted by the Mortgage Bankers Association of America. The delinquency rate for loans on one-to four-unit residential properties was 4.87 percent in the third quarter, up 24 basis points from the second quarter.

The percentage of loans on which foreclosure was started during the quarter rose 2 basis points to 0.38 percent, while the percentage of loans in the process of foreclosure rose 4 basis points to 0.95 percent.

The survey has been conducted since 1953 and covers more than 32 million loans on one-to-four-unit residential properties, representing about half of all first-lien residential mortgage loans outstanding in the United States. Loans surveyed were reported by approximately 130 lenders, including mortgage bankers, commercial banks, thrifts and life insurance companies.

MBA Chief Economist Douglas G. Duncan attributed the higher delinquency rate to the economy entering a recession, resulting in increasing unemployment. The events of Sept. 11 also may have been a factor in driving up short-term delinquencies.

"The weakening gross domestic product and job losses in the technology and manufacturing sectors have affected homeowners' ability to keep their mortgage payments current," said Duncan.

The delinquency rate increased for each of three loan types during the third quarter. The rate for conventional loans was 3.13 percent, up 20 basis points from the previous quarter. The rates for Federal Housing Administration-insured and Veterans Administration loans were 11.36 percent and 8.11 percent, up 57 and 48 basis points, respectively.

The inventory of loans in foreclosure at the end of the quarter increased for each of the loan types. The percentage of conventional loans in foreclosure increased 2 basis points to 0.70 percent. The percentage of FHA-insured loans in foreclosure increased 14 basis points to 1.94 percent and the percentage of VA loans in foreclosure rose 5 basis points to 1.25 percent.