CHICAGO — Job losses caused more Americans to fall behind on their mortgage payments in the third quarter, leading to a record 14.41 percent of loans either in foreclosure or with at least one payment past due, according to the Mortgage Bankers Association.
"Despite the recession ending in midsummer, 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 percent to 1.42 percent.” 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. The number of loans 90 days or more past due or in foreclosure was about 4 million, Brinkmann said. That compares with 3.9 million new and previously occupied homes for sale. 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. The delinquency rate for mortgage loans on one- to four-unit residential properties rose to a seasonally adjusted 9.