One in 10 homeowners with a mortgage face foreclosure as
government aid programs fall flat
One in 10 American households with a mortgage was at risk of
foreclosure this summer as the government's efforts to help have
had little impact stemming the housing crisis.
About 9.9 percent of homeowners had missed at least one mortgage
payment as of June 30, the Mortgage Bankers Association said
That number, which is adjusted for seasonal factors, was down
slightly from a record-high of more than 10 percent as of April
In a worrisome sign, the number of homeowners starting to have
problems with their mortgages rose after trending downward last
year. The number of homes in the foreclosure process fell slightly,
the first drop in four years.
More than 2.3 million homes have been repossessed by lenders since
the recession began in December 2007, according to foreclosure
listing service RealtyTrac Inc. Economists expect the number of
foreclosures to grow well into next year.
The number of Americans missing payments and falling into
foreclosure has followed the upward trend in unemployment, which
has been near double digits all year and has shown no sign of
"Ultimately the housing story, whether it is delinquencies, homes
sales or housing starts, is an employment story," Jay Brinkmann,
the trade group's top economist, said in a statement. "Only when we
see a consistent increase in employment will we see an increase in
sales and starts, and a sustained improvement in the delinquency
There was some modestly encouraging news. The percentage of
mortgage borrowers receiving foreclosure notices fell slightly to
4.57 percent in the April-to-June quarter. That's down from 4.63
percent in the January-to-March period and the first drop in four
And the percentage of loans receiving their first notice of
foreclosure also dipped. That fell to 1.1 percent in the second
quarter from 1.2 percent in the first quarter.
Besides forcing people from their homes, foreclosures and
distressed home sales have pushed down on home values and crippled
the broader housing industry. They have made it difficult for
homebuilders to compete with the depressed prices and discouraged
potential sellers from putting their homes on the market.
Government efforts haven't made much of a difference. Nearly half
of the 1.3 million homeowners who have enrolled in the Obama
administration's main mortgage-relief program have been cut loose
through July, the Treasury Department said last week. The program
is intended to help those at risk of foreclosure by lowering their
monthly mortgage payments.
Roughly 32 percent of those who started the program have received
permanent loan modifications and are making their payments on
Written by: Alan Zibel, AP Real Estate Writer