Home loans in the process of foreclosure climbed to 1.2 percent of all mortgages in the first quarter, beating the previous high of 1.18 percent set in the fourth quarter of 2002, the Mortgage Bankers Association of America said.
Mortgages entering the foreclosure process rose in the quarter to 0.37 percent from 0.35 percent in the fourth quarter.
While benefiting from the lowest borrowing costs in more than four decades, Americans have been straining to meet their mortgage payments and credit card bills.
In fact, the first-quarter increase in foreclosures was driven by the rise in foreclosed home loans owed by homeowners with blemished or "subprime" credit histories, Mortgage Bankers Association chief economist Doug Duncan said in a conference call on its latest loan study.
Until the economy improves and companies hire again, more Americans will default on their debt, economists say, and if defaults gain and the increase in home values slows, this will hamper economic growth.
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