Rate of Late Mortgages Rises Again; Bad Economy Pushing More People Into Foreclosure

The rate that mortgage holders were late with their payments by 60 days or more rose in the June-to-September period. It was the first time since 2009. 5.88% of homeowners missed two or more payments, which is an early sign of potential foreclosure.

The problems were widespread. BetweenQ2 and Q3, all but 10 states and the District of Columbia had an increase in delinquency rates.
TransUnion's Tim Martin, group vice president of U.S. Housing in TransUnion's financial services business unit, ays they can not pinpoint one particular reason for the jump. He pointed to number of reasons: the U.S. credit rating downgrade, the U.S. and European debt crises and the tanking U.S. stock markets during this period, and declines in consumer confidence.

Arizona had the best rate of improvement in the nation, and now has a delinquency rate of 7.46%, which is still the fourth worst in the country, and the highest foreclosure rate in the nation at one in every 44 housing units with a foreclosure filing in Q3

"Another possibility for the bump in the delinquency rate is that a new crop of adjustable mortgages written toward the end of the housing bubble is resetting. Even if their interest rates remain low after the adjustment, the payments might have increased", says Yahoo/AP, quoting Realtytrac.
TransUnion is now forecasting a few quarters of elevated nonpayment rates due to the uncertain economic outlook. Says Mr. Martin: "More and more homeowners are likely to struggle," "I'm not sure this is a one-quarter blip."

RealtyTrac agrees: "This isn't just about bad loans anymore," "It's about a bad economy that's pushing people into foreclosure."