Mortgage delinquencies and foreclosures reach 13%

08.21.09
By Timothy Jones

Although some analysts believe recent economic indicators show that the economy and housing market are stabilizing, figures released this week from the Mortgage Bankers Association (MBA) show that Americans are still having trouble paying their mortgage loans.

The percentage of people with at least one late payment increased to its highest level ever in the second quarter of 2009. According to the MBA, the mortgage delinquency rate - which includes loans that are a month past due but not those in the process of foreclosure - had risen to 4.3 percent for the second quarter - up 155 basis points from the same time in 2008.

When properties in the process of foreclosure are added to the mix the number jumps to 13.16 percent - a record-breaking number, according to the MBA.

Jay Brinkmann, chief economist for the MBA, says there is not likely to be improvement in the housing situation until the country sees progress in the unemployment rate - which currently stands at 9.4 percent.

"As for the outlook, it is unlikely we will see meaningful reductions in the foreclosure and delinquency rates until the employment situation improves," he says. "In addition, in some areas where a number of borrowers have mortgages that are larger than the current value of their homes, any life events such [as] a divorce or loss of a job are likely to translate into foreclosures until prices in those areas recover, not just flatten."

The MBA also noted that the states of Arizona, California, Florida and Nevada continue to struggle and made up 44 percent of all new foreclosure during the second quarter, although the number was down from 46 percent during the first quarter.

These numbers from the MBA match figures released earlier this week from TransUnion which showed that home loan delinquencies were up 65 percent year-to-year during the second quarter.

More Housing Market Articles | News Home | Discuss in our Forum

Mortgage delinquencies and foreclosures continue to rise