Borrowers with good credit scores are taking center stage as the most likely to default on mortgage loans as they lose jobs and take pay cuts.
About 12 percent of home owners with mortgages were behind on their payments in the first quarter, the Mortgage Bankers Association (MBA) said Thursday. Moreover, nearly 6 percent of prime borrowers with fixed-rate mortgages were past due on payments or in foreclosure.
States hardest hit by the overbuilding—California, Nevada, Arizona, and Florida—accounted for 46 percent of recent foreclosures with no expectation of improvement, according to Weiss Research.
MBA’s chief economist Jay Brinkmann expects the situation to get worse everywhere, with unemployment climbing until mid-2010.