WASHINGTON — With the recession throwing thousands of people out of work daily, more than 13 percent of American home owners with a mortgage have 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 shady 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.
And the layoffs keep coming. Lockheed Martin Corp. said this week it’s handing out about 800 pink slips in its space-systems division, and audio-conferencing company Polycom Inc. said it will cut about 80 positions.
New jobless claims rose last week to a seasonally adjusted 576,000, the Labor Department said Thursday. While the recession, measured by the nation’s total economic output, is likely over, most economists expect layoffs and foreclosures to keep rising for many months as companies remain in cost-cutting mode.
“Their confidence has been shattered,” said Brian Bethune, chief U.S. financial economist at IHS Global Insight. “They are going to be very conservative. They don’t want to be blindsided by a false-dawn economy.”
Nee Salam, 56, lost his engineering job at an automotive- electronics supplier south of Atlanta more than a year ago.
At the time, he said, “I was thinking the job market was going to change right away.”
But it hasn’t.
The worst of the trouble is still concentrated in California, Nevada, Arizona and Florida. Nearly 12 percent of all loans in Florida were in foreclosure, the highest in the country.
Colorado’s rates rise too
The number of Colorado residents behind on their mortgage payments continues to rise.
Six percent of home mortgages in the state were delinquent in the second quarter, according to the Mortgage Bankers Association’s National Delinquency Survey.
That compares with a 5.48 percent rate in the first quarter of this year and a 4.33 percent delinquency rate in the second quarter of 2008.
The seriously delinquent rate, mortgages that are 90 days or more behind or in foreclosure, is at 4.96 percent, compared with 4.76 percent in the first quarter.
Subprime adjustable- rate mortgages carry the highest delinquency rate — 18.59 percent. Eleven percent of FHA mortgages are delinquent in the state.
By contrast, only 2.89 percent of prime fixed- rate mortgages were delinquent.
Colorado has more than 1 million mortgages, nearly half as many as New York, a state with four times the population. That could reflect a high number of vacation and second homes in the state. Aldo Svaldi, The Denver Post
