U.S. home foreclosures climb to record

By Patrick Rucker

WASHINGTON (Reuters) - U.S. home foreclosures and the share of borrowers who face losing their homes rose to records in the fourth quarter and those figures will worsen, a mortgage industry trade group said on Thursday.

The rate of failing loans swelled across all mortgage types but was led by a growing wave of subprime borrowers unable to make payments, the Mortgage Bankers Association said in its delinquency and foreclosure survey.

The rate of failing home loans should climb through much of the year as national home values sink, said MBA chief economist Doug Duncan.

"You should expect to see, as long as house prices are declining, an increase in delinquencies and foreclosures," he added.

Lower home values make it difficult for struggling homeowners to refinance and can create an incentive for them to simply walk away from their home and mortgage.

"We don't expect to see the peak in delinquencies or foreclosures until mid to late 2008," Duncan said.

A record 0.83 percent of U.S. home loans were entering the foreclosure process in the last three months of 2007 compared with 0.54 percent in the same time a year earlier.

The U.S. mortgage delinquency rate of 5.82 percent was the highest since 1985 and up from the 4.95 percent seen in the fourth quarter of 2006.