by Calculated Risk on 9/14/2006 10:04:00 PM

From the USA Today: More fall behind on mortgages

More homeowners with shaky credit are falling behind on their mortgage payments, especially in such states as Ohio, Alabama, Tennessee, Michigan and West Virginia, where job losses have struck the local economies, the Mortgage Bankers Association said Wednesday.

The problem is the worst for those with subprime credit who pay higher-than-usual interest rates and who have adjustable loans that have been resetting to higher rates. About 12.2% of such borrowers were late paying their loans in April through June, the highest level since the end of 2003.

About 25% of all mortgages carry adjustable rates, and more than half of those loans are to subprime borrowers. As a result, delinquencies are expected to rise through next year as more adjustable-rate mortgages reset to higher rates, sending ripples through family finances and housing markets.

Calls to the Homeownership Preservation Foundation, which provides free credit counseling, hit a record 2,464 in August, a 25% jump over July. More than half of the distressed callers had ARM loans.

See the article for a state by state chart of delinquency rate.

Here is the MBA report: Some Delinquency Measures Tick Upwards

“Going forward we expect some further slowing in the economy and the housing market. As a result, we will see modest increases in delinquency and foreclosure rates in the quarters ahead,” said [Doug Duncan, MBA’s chief economist and senior vice president of research and business development].