Mortgage Delinquencies Soar
With job losses rising, the number of homeowners struggling with late mortgage payments soared to a record-high 6.99 percent in the third quarter, the Mortgage Bankers Association reported Friday.
At the same time, foreclosures rose to a new high of 2.97 percent, the report said.
Homeowners with subprime mortgages suffered the most over the July-September quarter, with 19.5 percent more than 30 days past due on their payments.
Despite a dip in the number of delinquent mortgages against which lenders had launched foreclosure actions, the rate of loans 90 days past due continues to climb. As a result, the current surge in foreclosures is unlikely to end any time soon, according to Jay Brinkmann, the Washington-based trade group's chief economist.
He blamed the bleak outlook on rising unemployment. California and Florida, the two states with the highest rate of foreclosures, also led the nation in job losses this year.
"We have not gone into past recessions with the housing market as weak as it is now, so it is likely that a much higher percentage of delinquencies caused by job losses will go to foreclosure than we have seen in the past," Brinkmann said in a statement.
About a third of U.S. small businesses are financed with home equity loans.