RECORD FAILURE RATE FOR US MORTGAGES

       Americans fell behind on their mortgage payments at a record pace in the second quarter as job losses and falling realestate prices thwarted government efforts to stabilise the housing market.
       The proportion of loans with one or more payments overdue rose to a seasonally adjusted 9.24 per cent of all mortgages, an all-time high, from 9.12 per cent in the first quarter, the Mortgage Bankers Association said last week.
       The inventory of homes in foreclosure increased to 4.3 per cent, the most in three decades of data, and loans overdue by at least 90 days, the point at which foreclosure proceedings typically begin, rose to 7.97 per cent, the highest on record.
       "We've seen a significant drop in the problem with sub-prime loans, and we've moved now to a problem with prime fixed-rate loans," said Jay Brinkmann, the association's chief economist.
       "Job losses are driving it, and we expect that to continue into next year."
       Home-owners fall behind on their mortgage payments when they lose their jobs, and falling prices mean they cannot sell their homes for enough to pay off their loans, Brinkmann said. Companies have shed 5.7 million jobs since January 2008, the biggest employment loss since the Great Depression. The median US home price fell 16 per cent year on year in the second quarter, the steepest drop on record, said the National Association of Realtors.
       The percentage of loans on which foreclosure actions have started was 1.36 per cent, down from 1.37 per cent in the first quarter, driven by the decline in subprime loans. New foreclosures on prime loans increased from 0.94 per cent to 1.01 per cent, while sub-prime loans dropped from 4.65 per cent to 4.13 per cent, Brinkmann said.