As of June 30, 32 percent of prime mortgage defaults in Nevada were on non-owner occupied properties, along with 24 percent of subprime loans.  In Florida, the non-owner occupied shares were 25 percent for prime loans and 14 percent for subprime loans.  Nevada and Florida are facing the fastest increases in delinquent loans in the country.

In Arizona, 26 percent of prime loan defaults were non-owner occupied and 18 percent of subprime loans.  In California, the rate was 21 percent of prime defaults and 15 percent of subprime. Arizona and California are also among the states facing the fastest increases in delinquent loans in the country.

In contrast, in the rest of the country, non-owner occupied homes accounted for only 13 percent of prime defaults and 11 percent of subprime defaults. 

"Defaults are on the rise in most parts of the country, but it should be recognized that it is not always the case of a homeowner losing his or her home but is often the case of an investor gambling on a continued increase in home values and losing that gamble," said Doug Duncan, MBA Chief Economist and Senior Vice President of Research and Business Development.

"California, Nevada, Arizona and Florida were among the states with the fastest home price appreciation over the last five years.  This rapid price appreciation attracted both speculators and home builders, a volatile combination that lead to an over-supply of homes that was beyond the capacity of the local populations to support.  When this over-supply became apparent and prices began to fall, many of these investors simply walked away from their mortgages," Duncan said.

Defaulted mortgages are defined as those 90 days or more past due or in foreclosure.  The MBA will be releasing its next National Delinquency Survey results in the coming weeks.

While details of 2006 mortgage originations will not be released until later in September, the share of non-owner occupied loans of all loan defaults closely parallels the share of those loans originated in 2005 as shown in the following tables:

Source:  MBA, Home Mortgage Disclosure Act 2005 Report

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The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 370,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,400 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA's Web site:  www.mortgagebankers.org.