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Problem mortgages hit new high at 14 percent
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| Parent(s) |
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| Contributor | Scott³ |
| Last Edited | Scott³ Nov 20, 2009 10:17am |
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| Category | News |
| Author | Renae Merle |
| Media | Newspaper - Washington Post |
| News Date | Friday, November 20, 2009 04:00:00 PM UTC0:0 |
| Description | "More than 14 percent of borrowers were in trouble on their mortgage during the third quarter, a new record, according to an industry survey released Thursday, which also suggests that the foreclosure rate is likely not to peak until next year as unemployment rates continue to rise.
Unemployment remains a big driver of the problem, according to the Mortgage Bankers Association, which conducts the survey. Those with delinquent loans now include a growing portion of people traditionally considered creditworthy and people whose mortgages are insured by the Federal Housing Administration.
"The outlook is that delinquency rates and foreclosure rates will continue to worsen before they improve," said Jay Brinkmann, the group's chief economist.
About 9.6 percent of borrowers were delinquent on their mortgage during the third quarter, according to the survey, and another 4.5 percent more were somewhere in the foreclosure process. Overall, about 14 percent of mortgage loans or 7.4 million households were delinquent or in the foreclosure process during the quarter, according to the group.
That is the highest level recorded by the survey, which has been conducted since 1972, and is up from about 10 percent of borrowers who were in trouble during the same period last year.
If unemployment rates peak by the middle of next year, foreclosures could reach their highest levels by the end of the year, Brinkmann said. But even after peaking, foreclosure rates are likely to remain elevated as borrowers in regions that have had steep price declines and now owe more than their home is worth continue to struggle, he said." |
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