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Fewer people fell behind on mortgages at end of 2009

Fewer people fell behind on their mortgages as

Fewer people fell behind on their mortgages as 2009 came to an end. New York continued to be less affected than most states.

Fewer borrowers started falling behind on mortgages as last year ended, but a record 15 percent defaulted, the Mortgage Bankers Association said Friday in releasing fourth-quarter data.

Nationwide, 3.6 percent of borrowers were one month late, down from 3.8 percent the preceding quarter and 3.9 percent a year ago, the report said.

New York continued to be less affected than most states, with 3.4 percent of borrowers one month late and 13.7 percent behind, including those in the foreclosure or loan modification processes, said the report, which covers 44 million mortgages nationwide in one-to-four-unit residential buildings.

The group's chief economist, Jay Brinkmann, considered drops in the 30-day delinquency impressive, because that figure usually spikes at the end of the year as homeowners face high heating and holiday bills.

"We are likely seeing the beginning of the end of the unprecedented wave of mortgage delinquencies and foreclosures that started with the subprime defaults in early 2007," he said.

The percentage of newly-delinquent borrowers can be a clue on the health of home values, pummeled by the crisis.

But Babylon real estate broker Susan DeLuca Maisto isn't sure if the good news is big enough to start stabilizing the Long Island market, where the average house takes 12 months to sell.

"I ache for people . . . trying to buy houses where I want to scream and say, 'This house isn't worth a third of what they're asking for it.' "

The 15 percent delinquency rate, up from 14.4 percent in the preceding quarter, is the highest since the group began electronic records in 1979.

In the fourth quarter, 34.6 percent of new foreclosure proceedings were prime, fixed-rate loans, and 17.3 percent were subprime, adjustable ones, data show.

A year ago, subprime, adjustable-rate loans were at the top with 30.2 percent, followed by prime, fixed-rate loans at 24.8 percent.

"Prime, fixed-rate loans tend to be the most difficult loans to modify," Brinkmann said, "because when they run into trouble, it tends to be an income-related issue."

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