Mortgage Delinquencies Hit Record High in Second Quarter
August 20, 2009 - 9:26 AMMore than 13 percent of American homeowners with a mortgage are either behind on their payments or in foreclosure as the recession throws more people out of work, the Mortgage Bankers Association said Thursday.
The record-high numbers in the report are being driven by borrowers with traditional fixed-rate mortgages, rather than the shady subprime loans with adjustable rates that kicked off the mortgage crisis. As of June, more than 4 percent of all borrowers were in foreclosure and about 9 percent had missed at least one payment.
One in three new foreclosures between April and June was from a prime, fixed-rate loan, up from one in five a year earlier. Last year, subprime adjustable-rate loans caused the largest share of foreclosures.
The worst of the trouble is still concentrated in California, Nevada, Arizona and Florida, which accounted for 44 percent of new foreclosures in the country. Nearly 12 percent of all loans in Florida were in foreclosure, the highest in the country, followed by Nevada at 9 percent.
"Clearly we have not seen the bottom in Florida," said Jay Brinkmann, the trade group's chief economist.
President Barack Obama has pledged to fight the problem, but its foreclosure prevention program, known as "Making Home Affordable," is off to a disappointing start. As of July, only about one in 10 of eligible borrowers had signed up.
The success of the program depends on the economy stabilizing. The number of first-time claims for unemployment benefits rose unexpectedly for the second straight week, the Labor Department said Thursday.
The number of new jobless claims rose to a seasonally adjusted 576,000 last week, from a revised figure of 561,000. Wall Street economists expected a drop to 550,000, according to a survey by Thomson Reuters.
AP Economics Writer Christopher S. Rugaber contributed to this report.
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