Foreclosures drop

More Utahns are paying their mortgages on time, and the state continues to boast one of the lowest foreclosure rates in the nation, according to a new report.

For the three months ended March 31, Utah's foreclosure rate dropped to 0.57 percent, less than half the national rate and down from the state's 0.87 percent rate in the first quarter of 2006, according to the Mortgage Bankers Association's delinquency survey.

The last time Utah's foreclosures were lower was in the second quarter of 1998, when the rate was 0.56 percent.

Nationally, the foreclosure rate climbed to 1.28 percent in the first quarter, up from 0.98 percent in the same period last year.

Nearly three years ago, Utah ranked among the 10 states with the highest foreclosure rates. Since then, the state's strong job growth and rising real estate values have sent foreclosures tumbling.

Only 11 states posted lower foreclosure rates than Utah in the first quarter.

In Utah, mortgage delinquencies — loans 30 days or more late but not yet in foreclosure — fell to 3.05 percent, down from 3.29 percent in the first quarter of 2006 on a non-seasonally adjusted basis.

Nationally, delinquencies were at 4.33 percent in the first quarter on a non-seasonally adjusted basis. When seasonally adjusted, the national delinquency rate stood at 4.84 percent in the first quarter, up from 4.41 percent one year ago.

Doug Duncan, MBA's chief economist, said in a prepared statement that the rise in delinquencies nationally is being driven by just seven states.

"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," Duncan said. "And the rate of foreclosures started nationwide would have fallen were it not for the big jumps in California, Florida, Nevada and Arizona."

In Arizona, California, Florida and Nevada, speculators are walking away from properties now that home prices have started to fall in areas of those states, Duncan said. In addition, speculators in Florida are facing much higher insurance bills.

Ohio, Indiana and Michigan — which have seen drastic cuts in manufacturing employment — account for 8.7 percent of the mortgage loans in the country. However, those three states accounted for 19.9 percent of the nation's loans in foreclosure in the first quarter.

Jeff Thredgold, president of Thredgold Economic Associates and a consultant to Zions Bank, said Utah did not witness housing speculation like Arizona, Florida and California did and therefore will not experience the rise in foreclosures that those states are witnessing.

"It's partly because some local lenders are a little more conservative," Thredgold said. "They required people if they are going to buy something to live in it. We don't tend to attract nearly as many of those kind of investors as what you did find in Naples, Orlando, Miami, San Diego, Phoenix and Vegas."

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