Unemployment and other job-related cutbacks pushed the percentage of Marylanders behind on their mortgage payments to the highest level in three years during the April-June quarter, the Mortgage Bankers Association of America said yesterday.
The association said its survey indicates the percentage of Maryland homeowners at least 30 days behind on their mortgage payments was up 0.82 percent in the second quarter to 4.14 percent, the highest level since 1988.
"The major thing that's going on is the unemployment rate -- which is a proxy for the state of the economy as a whole," says Richard Peach, deputy chief economist for the Washington-based organization.
With its rising mortgage delinquency rate, Maryland reflects the overall trend of the U.S. economy. Last week, the mortgage bankers group reported substantial second-quarter increases in mortgage delinquencies in all regions of the country and linked those increases to the recession.
"There's nothing special about Maryland. People are losing their jobs. And when you lose your job, you can't make a house payment," said Buddy Koolhof, branch manager for NVR Mortgage in Owings Mills.
"Companies are getting leaner and meaner. In the computer age, there is less need for physical bodies to do the same production," said Mr. Koolhof. He said "getting unemployed is not anything new. But getting new employment is harder than it used to be. No one is hiring."
Mortgage specialists caution that home loan delinquency rates could get worse before they get better. That's because delinquency rates tend to lag developments in the economy, and most homeowners have savings, severance pay or other resources to cushion the financial blow immediately after losing their jobs.
"If the unemployment rate doesn't come down, you're going to see more defaults," predicted Dallas Arthur, a senior vice president at Carrollton Bank of Baltimore.
The mortgage bankers association survey covers about a third of the outstanding mortgages in Maryland, according to Sharon J. McHale, a spokeswoman for the organization.