More Bad News for Homeowners

The percentage of homeowners either in foreclosure or late on a mortgage payment topped 13 percent nationwide in the second quarter of 2009, the Mortgage Bankers Association reported today. The figure is the highest since the MBA began keeping records 37 years ago.

And the trouble is expected only to get worse.

Jay Brinkmann, MBA’s chief economist, predicts that, based on rising unemployment projections, the number of foreclosures likely won’t peak until the end of 2010.

“Our forecast is that jobless rates will peak in the middle of next year, and we’ll expect delinquencies to peak then and foreclosures to peak after,” Brinkmann said, according to The Hill.

Not that Washington policymakers haven’t taken steps to help struggling homeowners. But the Obama administration’s plan, which relies primarily on banks to modify mortgages voluntarily, hasn’t kept pace with the rising number of foreclosures.

As a result, some congressional Democrats would like to return to bankruptcy reform legislation, which failed in the Senate earlier this year. Indeed, a subpanel of the Senate Judiciary Committee held a hearing on “cramdown” this morning in Rhode Island.