Mortgage delinquency rate rises in Va.

The delinquency rate for mortgage loans on residential properties in Virginia stood at 7.7 percent at the end of the third quarter, up from 6.9 percent in the previous quarter, according to the Mortgage Bankers Association.

Nationally, the delinquency rate for mortgage loans was 9.94 percent, up from 8.86 percent in the second quarter.

The delinquency rate excludes loans in the process of foreclosure.

The percentage of loans in Virginia on which foreclosures were started during the quarter decreased by 2 basis points to 0.91 percent, while the percentage of loans that were in the foreclosure process at the end of the quarter remained unchanged at 2.18 percent.

The rates are not seasonally adjusted. Delinquency rates normally increase between the second and third quarters because of seasonal factors.

Among the 50 states and the District of Columbia, Virginia ranked 35th in delinquencies and 29th in foreclosures started.

Mississippi ranked first in delinquencies with a rate of 14 percent, and Nevada was first in foreclosure starts with a rate of 3.76 percent.

About 18 percent of all mortgage originations in Virginia are nonprime borrowers, where the foreclosure problem is concentrated, compared with a national average of 21 percent.

The national foreclosure crisis likely will persist well into next year as high unemployment pushes more people out of homes, pulls down housing prices and raises concerns about the broader economic recovery.

According to the report from the bankers association, a rising proportion of fixed-rate home loans made to people with good credit are sinking into foreclosure. That's a shift from last year, when riskier subprime loans drove the housing crisis.

The report also found that 14 percent of homeowners with a mortgage were behind on payments or in foreclosure at the end of September. That was a record-high figure for the ninth consecutive quarter.

The data suggest housing and the broader recovery will remain under pressure from the surge in home-loan defaults, especially as unemployment keeps rising. Lost jobs are the main reason homeowners are falling behind on their mortgages.

"There's no indication in this data that foreclosures are going to abate anytime soon," said Mark Zandi, chief economist at Moody's Economy.com, who projects that nationwide home prices will fall up to 10 percent before bottoming next fall.

Contact Carol Hazard at (804) 775-8023 or .

The Associated Press contributed to this report.