U.S. foreclosures top 1 million, report finds

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By Jim Puzzanghera

Troubled home loans continued to mount in the nation's banks in the third quarter as even once-solid borrowers increasingly fell behind on their mortgage payments.

For the first time, foreclosures on mortgages serviced by U.S. national banks and savings and loans topped the 1 million mark, according to figures released Monday by the Office of Thrift Supervision and the Office of the Comptroller of the Currency. The percentage of prime borrowers whose loans were more than 60 days past due doubled from the July to September period a year ago, while more than half of all homeowners whose payment had been lowered through modification plans re-defaulted.

The report, which covers about 34 million loans or about 65 percent of all U.S. mortgages, underscores the obstacles facing policymakers trying to strengthen the nation's housing market. Persistent unemployment is making it tough for millions of homeowners to pay their home loans.

In addition, many people whose monthly installments have been lowered through mortgage modification programs still are unable to keep up.

Current and performing mortgages serviced by national banks and thrifts fell to 87.2 percent — the sixth-straight quarter that the quality of their home loan portfolios has slipped.

"Mortgage performance continued to decline as a result of continuing adverse economic conditions, including rising unemployment and loss in home values," the report said.

U.S. foreclosures top 1 million, report finds

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