MarketWatch: Delinquencies, foreclosures break record

Delinquencies, foreclosures break record
MBA: 14.41% of mortgages delinquent or in foreclosure in third quarter

By Amy Hoak, MarketWatch


CHICAGO (MarketWatch) -- Job losses caused more Americans to fall behind on their mortgage payments in the third quarter, leading to a record 14.41% of loans either in foreclosure or with at least one payment past due, the Mortgage Bankers Association's chief economist said Thursday.

"Despite the recession ending in mid-summer, the decline in mortgage performance continues. Job losses continue to increase and drive up delinquencies and foreclosures because mortgages are paid with paychecks, not percentage point increases in GDP," said Jay Brinkmann, chief economist of the MBA, in a news release. "Over the last year, we have seen the ranks of the unemployed increase by about 5.5 million people, increasing the number of seriously delinquent loans by almost 2 million loans and increasing the rate of new foreclosures from 1.07% to 1.42%."

Delinquency and foreclosure rates are expected to continue worsening before improving, he said. The employment picture is unlikely to improve until sometime next year, and even then jobs will grow at a slow pace.

"Perhaps more importantly, there is no reason to expect that when the economy begins to add more jobs, those jobs will be in areas with the biggest excess housing inventory and the highest delinquency rates," he said.

About 4 million mortgage loans are 90 days or more past due or in foreclosure, Brinkmann said. That compares with 3.9 million new and previously occupied homes now for sale, he said, adding that there is likely overlap between the numbers.

"The ultimate resolution of these seriously delinquent loans will put added pressure on the hardest-hit sections of the country," he said. .............(more)

The complete piece is at: http://www.marketwatch.com/story/delinquencies-foreclosures-break-record-mba-2009-11-19-10500