Job losses push mortgage delinquencies to a record

WASHINGTON -- More than 13% of U.S. homeowners with a mortgage are either behind on their payments or in foreclosure as the recession throws more people out of work, the Mortgage Bankers Association said Thursday.

The record numbers in the report 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% of borrowers were in foreclosure and about 9% had missed at least one payment.

One in three new foreclosures between April and June was from a prime, fixed-rate loan, up from one in five a year earlier. Last year, subprime adjustable-rate loans caused the largest share of foreclosures.

The worst of the trouble is still concentrated in California, Nevada, Arizona and Florida, which accounted for 44% of new foreclosures in the country. Nearly 12% of loans in Florida were in foreclosure, highest in the country, followed by Nevada at 9%.

"Clearly we have not seen the bottom in Florida," said Jay Brinkmann, the trade group's chief economist.

President Obama has pledged to fight the problem, but the administration's foreclosure prevention program, known as "Making Home Affordable," is off to a disappointing start. As of July, only about one in 10 eligible borrowers had signed up.

The success of the program depends on the economy stabilizing. The number of first-time claims for unemployment benefits rose unexpectedly for a second week, the Labor Department said Thursday.

The number of new jobless claims rose to a seasonally adjusted 576,000 last week, from a revised 561,000 the week before. Economists expected a drop to 550,000, according to a survey by Thomson Reuters.