Home loan troubles break records again
WASHINGTON – A record one in 10 American homeowners with a mortgage were either at least a month behind on their payments or in foreclosure at the end of September as the source of housing market pressure shifted from risky loans to the crumbling U.S. economy.
The percentage of loans at least a month overdue or in foreclosure was up from 9.2 percent in the April-June quarter, and up from 7.3 percent a year earlier, the Mortgage Bankers Association said Friday.
The foreclosure crisis continued to be concentrated in states like Florida, where a stunning 7.3 percent of all loans were in foreclosure at the end of September, by far the highest in the country.
In Nevada, the number was 5.6 percent. It was 3.9 percent in California – compared with about 3 percent nationally.
Distress in the home loan market started about two years ago as increasing numbers of adjustable-rate loans reset to higher interest rates. But the latest wave of delinquencies is coming from the surge in unemployment.
Employers cut 533,000 jobs in November, the most in 34 years, hiking the jobless rate to 6.7 percent, the Labor Department said. “Now it’s a case of job losses hitting more across the board,” said Jay Brinkmann, the trade group’s chief economist.
With the economy worsening, the much-anticipated bottom of the housing market likely will be pushed further into the future.
“Things are going to get worse before they get better,” said Northern Virginia housing economist Thomas Lawler.
Most troubling, he said, is that the mortgage bankers’ report reflects conditions before October’s stock market plunge and the resulting economic fallout.
“The number of homes that are in the foreclosure process is so high – right before the economy has fallen off a cliff,” Lawler said.
The U.S. tipped into recession last December, a panel of experts declared earlier this week, and economists fear it could be the longest and most severe in decades. Since the start of the recession, the economy has lost 1.9 million jobs.