The Portland Press Herald / The Maine Sunday Telegram

February 17

Mortgage difficulties mounting, report says

By EILEEN AJ CONNELLY AP Personal Finance Writer

NEW YORK - The percentage of homeowners late with mortgage payments hit another record during the last three months of 2009, and the pace at which they fell behind took a turn for the worse, a new report says.

For the fourth quarter, 6.89 percent of mortgage payments were 60 or more days past due, according to credit reporting agency TransUnion. That`s up from 4.58 percent in the final three months of 2008. The previous record delinquency rate was 6.25 percent in the third quarter of 2009.

The latest report marked the 12th consecutive quarter -- equal to three full years -- that delinquency rates have risen from the previous year.

More worrisome was that the quarter-to-quarter trend swung higher after declining in each of the previous three quarters.

The fourth-quarter uptick was in part due to normal seasonal spending shifts, said FJ Guarrera, vice president of TransUnion`s financial services business unit. Consumers are more likely to have trouble paying bills during the last few months of the year, as they run low on cash because of holiday spending.

But even accounting for normal season patterns, there is some reason to be concerned about the pace of increase moving higher, Guarrera said. ``To see continuing growth in the first quarter would certainly raise an eyebrow,`` he said.

He noted that many homeowners still have adjustable rate mortgages written in late 2006 or early 2007 due to reset to higher rates in coming months. That could drive foreclosures even higher, especially in areas where home prices have fallen to the point where values are lower than mortgages. ``We`re not out of the woods yet,`` Guarrera said.

TransUnion said the delinquency rate stayed highest in Nevada, at 16.2 percent, and Florida, at 14.9 percent. Arizona and California, the other two states hit hardest by the housing crisis, were third and fourth, at 11.3 percent and 11 percent.