More homeowners than ever before are falling behind on their mortgage payments and sliding into foreclosure, according to figures released on Thursday, a sign that the country’s housing crisis is spreading through the ranks of previously stable borrowers.
About 5.4 million of the country’s 45 million home loans were delinquent or in some stage of the foreclosure process in the first three months of the year, according to the Mortgage Bankers Association. About 12.07 percent of all mortgages were delinquent or in foreclosure, up from 11.93 percent at the end of 2008.
Temporary halts on foreclosures imposed by lenders and mortgage underwriters have mostly ended, and banks are moving quickly against delinquent homeowners.
Housing specialists said the number of foreclosures would probably keep rising as more people lose their jobs or are forced to trade full-time work for part-time. Nearly six million jobs have been lost since the recession began a year and a half ago, and many economists expect the unemployment rate to rise to 10 percent from its current 8.9 percent.
More defaults by unemployed homeowners could shunt more houses onto an already saturated market, economists said, dragging prices down farther.
“We’re still caught in this vicious cycle,” said Patrick Newport, an economist at IHS Global Insight. “These numbers were horrible, and they’re going to get worse. This problem’s going to be with us for a while.”
The wave of employment-driven foreclosures could pose new challenges to the administration as it tries to stabilize falling housing values and keep up to nine million families in their homes.