U.S. Mortgage Delinquencies Reach a Record High
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By DAVID STREITFELD Published: November 19, 2009
Nearly one in 10 homeowners with mortgages were at least one payment behind in the third quarter, the Mortgage Bankers Association said Thursday.
That is the highest figure since the association began keeping records in 1972. It is up from about one in 14 mortgage holders in the third quarter of 2008.
“Clearly the results are being driven by changes in employment,” Jay Brinkmann, the association’s chief economist, said on a conference call with reporters. Five million more unemployed people over the last year has turned into about two million more overdue loans, he added.
The association’s delinquency numbers do not include those who are actually in foreclosure, a figure that also rose sharply, to 4.47 percent of all loans. A year ago, it was 2.97 percent.
The combined percentage of those in foreclosure as well as delinquent is 14.41 percent, or about one in seven mortgage holders. About 52 million homeowners have mortgages.
In previous recessions, homeowners who lost their jobs could sell the house and move somewhere there were better prospects, or at least a cheaper lifestyle. This time around, many of the unemployed are finding that the value of their property is less than they owe. They are stuck.
“This translates into more foreclosures,” Mr. Brinkmann said.
It also indicates that foreclosures, instead of peaking with the unemployment rate next year, will be a lagging indicator. The association expects foreclosures to peak in 2011.
The data indicate that borrowers in trouble are no longer just those who took out subprime loans. High-quality prime fixed-rate mortgages now represent the largest share of new foreclosures.
The survey is based on a sample of more than 44 million mortgage loans serviced by mortgage companies, commercial banks, thrifts, credit unions and others.
While the percentages of loans 90 days or more past due, loans in foreclosure, and foreclosures started all set record highs, the percentage of loans 30 days past due is still below the record set in the second quarter of 1985. At that point, the recovery from the recession of the early 1980s was well under way.
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