Mortgage Delinquencies Up, Wisconsin Homeowners Have Options

Even though the Great Recession officially ended in 2009, it’s abundantly clear that millions of Americans are still hurting. Indeed, new data shows that the rate of late mortgage payments increased last quarter for the first time since the end of 2009.

Between June and September 2011, 5.88 percent of American homeowners were more than 60 days late with two or more mortgage payments. The increase means a growing number of Americans are headed toward home foreclosure, sparking fears that the economy may be headed toward a double-dip recession.

Unlike earlier increases in delinquent payments, the current uptick can’t be directly tied to increases in housing prices or unemployment. Although they both still play an important role, housing prices and unemployment rates have remained relatively flat. Instead, larger economic issues are taking a leading role – experts say things like the U.S. and European debt crises and plummeting stock prices shattered consumer confidence and led to late payments.

Some of the late payments may be the result of homeowners who have given up on their mortgages because their homes are worth so much less than they owe on their loans.

Other delinquencies can be attributed to changes in adjustable-rate mortgages. Loans issued at the tail-end of the housing bubble are just now starting to reset.

Bankruptcy Can Help Save a Home

The uptick in late payments shows what too many families know firsthand – it’s still hard out there, and the economy might not fully recover for a long time.

Wisconsin residents certainly haven’t been spared. Over 4,000 Wisconsin homeowners received a foreclosure filing in October 2011, with Milwaukee County having far and away the highest rate.

Homeowners who are worried about foreclosure may be able to save their homes by consulting with a Wisconsin bankruptcy attorney. A Chapter 13 bankruptcy gives homeowners an opportunity to catch up on their payments over time. For borrowers who can’t afford a payment plan or who don’t want to keep their homes, other options may exist.

If you are facing foreclosure, know that you don’t have to go it alone. Contact an experienced bankruptcy and foreclosure attorney who can help you understand your options.

Source: CBS Money Watch, “Late Mortgage Payments Up in 3Q, 1st Rise in Years.”