5.4M home loans in distress, bankers say

WASHINGTON, May 28 (UPI) -- The Mortgage Bankers Association said Thursday a record 5.4 million U.S. home loans were in distress in the first quarter of 2009.

With 45 million home loans in the country, 12.07 percent were either delinquent or facing foreclosure procedures, The New York Times reported.

At the end of the fourth quarter, 11.93 percent of all mortgages were in distress.

"We're still caught in this vicious cycle. These numbers were horrible and they're going to get worse," said IHS Global Insight economist Patrick Newport.

With unemployment at 8.9 percent and expected to rise, Jay Brinkmann, chief economist of the Mortgage Bankers Association, said "it does not appear the level of mortgage defaults will begin to fall until after the employment situation begins to improve."

The Commerce Department said Thursday new-home sales improved slightly in April from March, with sales growing 0.3 percent. However, sales were also 34 percent lower than April a year ago.