Delinquencies and foreclosures tick down in third quarter

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The number of Americans falling behind on their mortgage payments declined slightly over the summer, according to data released Thursday, though the country’s stark employment situation continues to be a strain on the housing market.

The Mortgage Bankers Assn. said 9.1% of homeowners had missed at least one mortgage payment during the third quarter, a decline from 9.9% in the second quarter and 9.6% in the third quarter of 2009.

Michael Fratantoni, vice president of research and economics for the association, said the troubled economy continued to be the biggest factor driving people to fall behind on their home payments and enter foreclosure.

“Most often, homeowners fall behind on their mortgages because their income has dropped due to unemployment or other causes,” he said. “Although the employment report for October was relatively positive, the job market had improved only marginally through the third quarter, so while there was a small improvement in the delinquency rate, the level of that rate remains quite high.”

[Updated at 4:20 p.m. PST] To hear a full discussion of Thursday’s report from mortgage bankers economists check out the recently posted podcast of the morning conference here.

The percentage of U.S. loans in the foreclosure process at the end of the third quarter declined slightly to 4.4% from 4.6% the prior quarter and 4.5% in the third quarter of 2009, according to the report.

-- Alejandro Lazo