Americans fell behind on their mortgage payments at a record pace in the second quarter as job losses and falling real estate prices thwarted government efforts to stabilize the housing market.
More than 13 percent of American homeowners with a mortgage have now fallen behind on their payments or are in foreclosure.
The record-high numbers released Thursday by the Mortgage Bankers Association are being driven by borrowers with traditional fixed-rate mortgages, rather than the subprime loans with adjustable rates that kicked off the mortgage crisis. As of June, more than 4 percent of all borrowers were in foreclosure, while about 9 percent had missed at least one payment.
“We’ve seen a significant drop in the problem with subprime loans, and we’ve moved now to a problem with prime fixed-rate loans,” said Jay Brinkmann, the Washington trade group’s chief economist. “Job losses are driving it, and we expect that to continue into next year.”
The percentage of loans on which foreclosure actions were started was 1.36 percent, down from 1.37 percent in the first quarter, driven by the decline in subprime loans. New foreclosures on prime loans increased to 1.01 percent from 0.94 percent, while subprime loans dropped to 4.13 percent from 4.65 percent, Brinkmann said.
The delinquency rate for prime loans rose to 6.41 percent from 6.06 percent, and the share of prime loans in foreclosure increased to 3 percent from 2.49 percent.
Loan delinquencies among borrowers with prime, fixed-rate mortgages grew from the first quarter to the second in all 50 states, with the biggest jumps in Wisconsin, Illinois, Utah and West Virginia.
President Barack Obama has pledged to fight the problem, but the government’s foreclosure prevention program, known as “Making Home Affordable,” is off to a disappointing start. As of July, only about one in 10 of eligible borrowers had signed up.
