Mortgage Foreclosures Hit Record as Job Losses Strain Budgets

But things are getting better, right Ben?

By Kathleen M. Howley
May 19 (Bloomberg) -- A record share of U.S. mortgages were in foreclosure in the first quarter as job losses caused homebuyers to fall behind on monthly payments, thwarting government efforts to stem property seizures.

The inventory of homes in foreclosure rose to 4.63 percent from 4.58 percent in the fourth quarter, the Mortgage Bankers Association said in a report today. The combined share of foreclosures and mortgage delinquencies was 14 percent, or about one in every seven U.S. mortgages.

Job losses have strained budgets, making it difficult for households to pay monthly bills, said Jay Brinkmann, the Washington-based trade group’s chief economist. U.S. unemployment in the second half of 2009 -- when people now in foreclosure would have first fallen behind on their payments -- reached the highest levels since 1983, according to the Bureau of Labor Statistics. The unemployment rate declined to 9.7 percent in the first quarter of this year from 10 percent in the last three months of 2009.

“The unemployment rate is the major factor driving the numbers,” Brinkmann said today in an interview. “We’re seeing the states with the biggest unemployment problem, like Ohio, Illinois and Michigan, showing the biggest increases.”

Ten percent of U.S. mortgage holders had payments 30 days or more overdue, on a seasonally adjusted basis, up from 9.47 percent in the previous quarter, Brinkmann said. On a non- adjusted basis, the rate fell to 9.38 percent from 10 percent, possibly an early sign of improvement as job losses abated, he said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ahBIgAgVMwdg&pos=6