A tenth of US mortgages 'in trouble'

A record one in 10 Americans with a mortgage are either in arrears or having their house repossessed, according to latest figures.

The Mortgage Bankers Association said today the percentage of loans at least a month overdue or in foreclosure in September was up from 9.2% in the April-June quarter, and from 7.3% a year earlier.

Trouble in the home loan market started about two years ago as increasing numbers of adjustable-rate loans reset to higher interest rates. But the latest wave is coming from the surge in unemployment.

“Now it’s a case of job losses hitting more across the board,” said Jay Brinkmann, chief economist of the Mortgage Bankers Association.

Job losses are already having an impact in rising default rates for traditional 30-year fixed rate loans made to borrowers with strong credit.

Total failures on those loans rose to 3.35% in September from 3.07% at the end of June, the MBA said.