Foreclosures jump as exemptions expire

THE ASSOCIATED PRESS

Foreclosures on Louisiana homes jumped 35 percent during the third quarter of 2006 as lenders were able to move against hurricane victims who had not made mortgage payments since the 2005 storms.

At the end of the third quarter, there were 1,866 loans statewide in foreclosure, up from 1,381 at the end of the second quarter, the Mortgage Bankers Association reported last week.

Freddie Mac, an agency that provides mortgage money to banks and other lenders, implemented blanket moratoriums on foreclosures in parishes affected by Hurricanes Katrina and Rita.

But those moratoriums expired on Aug. 31, so the third quarter was the first period in which storm-related foreclosures occurred.

A number of foreclosure cases that began in 2005 but stalled because of the hurricanes also moved forward in the third quarter and were included in the figures, the MBA said.

“Even though there was an increase, it was still way below historic norms for similar periods,” said Jay Brinkmann, vice president of research and economist for the Washington, D.C.-based bankers association.

Louisiana generally records about 2,600 new foreclosures each quarter, he said.

Officials said the percentage of foreclosures tied to the 2005 storms is still small.

Freddie Mac, which allowed 17,832 borrowers to delay the post-hurricane resumption of their mortgage payments by months, said less than 1 percent of those borrowers, or 132, have been foreclosed on, said agency spokesman Brad German.

Only 48 of those 132 are in the New Orleans area, German said. The remainder of the delayed loans payments are being worked out, have been made current or continue to be delayed, German said.

Fannie Mae, another supplier of mortgage money to lenders, gave 35,000 homeowners extra time to make payments after the storms, said spokeswoman Chrissie McHenry. McHenry said she did not know of any foreclosures that had been initiated.

In a sign that many of those hurricane-affected borrowers are working through their financial obstacles, the number of people behind on their mortgage payments fell in the third quarter. The biggest decline involved mortgages that were 90 days or more past due, Brinkmann said.

Of the more than 424,000 total loans statewide, 16,839 were more than three months past due at the end of the third quarter, down from 22,835 at the end of the second quarter. Most of those loans, about 13,000, are in the disaster area, Brinkmann said.