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Foreclosures Soar 76 Percent to Record 1.35 Million
Two women facing foreclosure attend a protest. (Photo: Getty images)
Foreclosure rate hits nearly 3% in the third quarter, while another 7% of borrowers fell behind on their mortgages.
New York - A record 1.35 million homes were in foreclosure in the third quarter, driving the foreclosure rate up to 2.97%, the Mortgage Bankers Association said Friday.
That's a 76% increase from a year ago, according to the group's National Delinquency Survey.
At the same time, the number of homeowners falling behind on their mortgages rose to a record 6.99%, up from 5.59% a year ago, the association said.
This means that one in 10 borrowers in America are either delinquent or in foreclosure.
Many of those troubled borrowers are in California and Florida, which have among the highest delinquency rates in the nation.
The weakened economy and mounting job losses are expected to push these numbers even higher. And that will likely affect homeowners with prime, fixed-rate mortgages, which make up the vast majority of loans and have so far held up fairly well. Until now, much of the housing market's problems were concentrated in the subprime, adjustable-rate market, where homeowners with weak financial backgrounds got loans they ultimately couldn't afford.
"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," said Jay Brinkmann, MBA's chief economist.
Unemployment soared to 6.7% as payrolls shrunk 533,000 in November, the Bureau of Labor Statistics said Friday. It was the largest monthly job loss in 34 years, and brought the year's total job losses to 1.9 million.
The number of homes going into foreclosure in 2008 is on track to hit 2.2 million, Brinkmann said.
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