Newly Initiated Foreclosures

Third Quarter 2008

Newly initiated foreclosure actions totaled 281,298 in the third quarter, a 2.6 percent drop from the second quarter. Newly initiated foreclosures decreased for every risk category except subprime, which increased by 756 actions, or 1.0 percent from the second to the third quarters.

Prime loans had nearly 42 percent of all newly initiated foreclosure actions in the third quarter, while representing 67 percent of all loans. Subprime loans had 27 percent of newly initiated foreclosures in the quarter, while representing 9 percent of all loans.

Newly initiated foreclosures as a percentage of loans in each category corresponded to the relative risk of each category. For example, in the third quarter, newly initiated foreclosures on prime loans constituted just 0.51 percent of all prime loans. Newly initiated foreclosures on subprime loans constituted 2.46 percent of all subprime loans. Except for subprime, these ratios all declined in the third quarter.

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