Last Thursday, the Globe ran a story in its Boston.com real estate blog about the rise in foreclosures and loan delinquencies, in the 3rd quarter, 2007.

The reporter quoted from a press release it received from the Mortgage Bankers Association.

The share of subprime borrowers in Massachusetts who have fallen behind on their mortgage payments ranks fifth-highest among all states, trailing only Ohio, Michigan, Mississippi and Rhode Island, according to new data from the Mortgage Bankers Association.

The trade group reported that 28.41 percent of subprime borrowers in Massachusetts are delinquent on their payments. Lenders have initiated foreclosure proceedings against almost one in three of those borrowers.

Hmmm. That’s not what I read the report.

Because, instead of just taking the Globe’s word for it, I decided to ask the MBA to send me its press release.

Which it was happy to do.

And, while the results remain as “dire”, they differ from what the Globe reported. A little bit.

Here’s what the MBA report said:

The delinquency rate – which excludes loans already in foreclosure – for prime loans was 3.28 percent, up 72 basis points from the previous quarter, the rate for subprime loans was 19.28 percent, up 231 basis points from the previous quarter and the delinquency rates for FHA and VA loans were 15.08 percent and 8.93 percent, respectively …

I’m not sure where the Globe’s reporter got his figures. They don’t show up on the press release from the MBA. Perhaps newspapers get more data?

The problem I had with the reporter’s story was the tone:

The share of subprime borrowers in Massachusetts who have fallen behind on their mortgage payments ranks fifth-highest among all states, trailing only Ohio, Michigan, Mississippi and Rhode Island, according to new data from the Mortgage Bankers Association.

I don’t know if this is true, or not – the release I read did not discuss this, at all.

However, in the absence of more information, it portrays a situation not as it is, today.

Does any rational person think that Massachusetts’ loan problems are on par with Ohio and Michigan, the two states with the worst unemployment rates and economies in the United States, bar none?

My guess at first was that perhaps Massachusetts had a lot less subprime borrowers than in other states, so that even though the percentage of borrowers who were delinquent was high, the raw numbers themselves were low. (My thinking was that, in Massachusetts, either you got a prime loan or you weren’t able to get any loan.)

But, it turns out that’s not true. In fact, it’s the opposite (you learn something new, every day).

Here’s what the MBA says later in its press release:

Moreover, in the nation, Massachusetts ranked 23 in delinquencies and 22 in foreclosure inventory.

It is important to note that Massachusetts has 13 percent nonprime borrowers (FHA and subprime); with a greater percentage of lower credit quality borrowers as with FHA and subprime, delinquencies will typically be higher

That seems to imply that we, in fact, have a greater percentage of lower-quality borrowers than in other states, and therefore, according to the MBA, we have a higher number of delinquencies.

Either way, I think the Globe story doesn’t portray the full picture.

(To its defense, the story appeared in a blog, not in the regular paper, and we all know how sloppy blog writers can be …)

A better headline for the entry would have been:

“Massachusetts’ foreclosures remain steady compared to nation, according to MBA”

National results

The delinquency rate on residential properties was 5.81 percent by the end of the third quarter
The percentage of loans on which foreclosure was started during the quarter was 0.78 percent
The percentage of loans in the foreclosure process at the end of the quarter was 1.69 percent

Massachusetts results

The delinquency rate on residential properties was 5.3 percent by the end of the third quarter
The percentage of loans on which foreclosure was started during the quarter was 0.8 percent
The percentage of loans in the foreclosure process at the end of the quarter was 1.62 percent

(** Some of the reasons the Globe’s reporter may be sour on anything real estate can be found in his article in today’s Globe: Reporter’s realty check – By Binyamin Appelbaum)

(** BTW, Mr Applebaum: always buy the owners’ title insurance policy … trust me on this one …)

Source: Mortgage Delinquencies for Massachusetts Rise in Latest National Delinquency Survey

Also: Foreclosures hit record high (again) – By Binyamin Appelbaum, Boston.com

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