About one in seven American households with a mortgage are behind on payments or in foreclosure, according to new data from the Mortgage Bankers Association. That is up from about one in 10 a year ago.
The group reported that 14.4% of first-lien mortgages on one-to-four-family homes were 30 days or more overdue or in the foreclosure process. That is the highest rate since the MBA began reporting such data in 1972, and works out to about 7.5 million households at risk of losing homes. The percentage is up from 10% a year earlier and 7.3% two years ago.
Loan defaults have been rising swiftly for more than three years. At first, the problem largely reflected loose lending practices during the housing boom that allowed millions of people to buy homes they couldn’t afford. Now the problem is compounded by rising unemployment, which hit 10.2% at the end of 2009, the highest since 1982.
Unemployment may start gradually declining in the first half of 2010, said Jay Brinkmann, the MBA’s chief economist. If so, he said, the percentage of loans that are delinquent could start to decline by mid-year. But he said the number of loans in foreclosure is likely to remain elevated longer as banks struggle to figure out which borrowers might be able to stay in their homes if payments are lowered.
The states with the highest rate of home loans in foreclosure are Florida (12.7%), Nevada (9.4%) and Arizona (6.2%)
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Special thanks to James R. Hagerty
