Foreclosures down, but could increase with rising delinquencies

Fewer homeowners in the second quarter were faced with the prospect of moving because of foreclosure.

A report by the Mortgage Bankers Association indicated that the percentage of homeowners who received some type of foreclosure notice fell to 4.57 percent, down from 4.63 percent in the first quarter. It was the first time in four years that the percentage of homeowners facing foreclosure fell, said the survey.

However, the percentage of consumers who are at least one payment behind on their mortgage actually increased to 3.51 percent, the report added. It was a reversal of the positive improvements seen at the end of last year, when just 3.31 percent of homeowners were at least one payment behind. That could mean that more people will be moving due to foreclosure in the near future.

Jay Brinkman, the chief economist for the MBA, said that mortgage delinquencies are directly tied to unemployment. "Only when we see a consistent increase in employment will we see an increase in sales and starts, and a sustained improvement in the delinquency numbers."

Foreclosures have had a significant impact on many people's moving plans. According to Newsday, many homeowners are forced to relocate because they can no longer afford the house they're in.


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