For First Quarter Ever: Foreclosures Top One Million
December 22, 2009
(ChattahBox)—Foreclosures continue to plague the US housing market in record numbers and even once solid homeowners with pristine credit histories, are falling behind on mortgage payments. According to a report released Monday, by the Office of Thrift Supervision and the Office of the Comptroller of the Currency, the number of homes in foreclosure with mortgages serviced by U.S. national banks and savings and loans exceeded one million, for the first quarter ever.
Only 87.2 percent of mortgages serviced by national banks and thrifts, were current and performing. This marks the sixth consecutive quarter showing a rise in foreclosures.
“Mortgage performance continued to decline as a result of continuing adverse economic conditions including rising unemployment and loss in home values,” the report said.
Seriously delinquent mortgages, loans 60 or more days past due, and loans to delinquent borrowers who have filed for bankruptcy, rose 73.8 percent a year earlier, according to the report. This increase pushed the number of homes in the foreclosure process to a record 1.09 million.
The high unemployment rate is having an effect on the ability of borrowers to pay their bills, as well as their mortgages. And surprisingly, many of the borrowers who reduced their monthly payments through the mortgage modification program at the end of 2008, fell 60 days or more behind on their payments within three months of the modification, according to the report.
On the brighter side, more recent mortgage modifications have remained current. But the modification program is not doing enough to help borrowers, despite President Obama’s increased pressure on banks to modify more loans. Many of the modifications were offered on a three-month trial basis, with only a very small percentage made permanent.
So far, about 680,000 loans have been modified since the program was launched by the Obama administration in 2008.