The Mortgage Bankers Association said 6.99 percent of one-to-four unit mortgages, not including homes involved in foreclosure, were delinquent in the quarter.

Foreclosure proceedings were started on 1.07 percent of home mortgages during the quarter, although the figures changed depending on the type of loan.

For prime loans at fixed rates, 0.34 percent entered foreclosure proceedings in the quarter. For subprime loans with adjustable rates, often cited as the catalyst to the financial crisis, 6.47 percent of the loans entered foreclosure proceedings.

Nevada, Florida, Arizona, California, Michigan, Rhode Island, Illinois, Indiana and Ohio had more foreclosure starts than the national average, the report said.

"While 20 states showed declines in the rate of foreclosure starts between the second and third quarters, every state showed an increase in the 90 days or more delinquent category with the exception of Alaska and all of the increases were greater than what we would expect due to normal seasonal factors," MBA Chief Economist Jay Brinkman said.