One in 10 American home owners with a mortgage were at least a month behind on their payments or in foreclosure at the end of September, according to a report by the Mortgage Bankers Association.

The increase in the overall delinquency rate was driven by increases in the number of loans 90 or more days past due, primarily in California and Florida. The ailing job market is at fault, the MBA report says.

“Now it’s a case of job losses hitting more across the board,” said Jay Brinkmann, chief economist of the MBA.

Employers cut 533,000 jobs last month, the most in 34 years, which pushed the unemployment rate to 6.7 percent, according to the Labor Department.

Bankers believe there are some hopeful signs. Among them: Loans entering the foreclosure process in the third quarter totaled 1.07 percent of all loans in the third quarter, flat from the second quarter.

Source: The Associated Press, Alan Zibel (12/05/2008)

Self-employed professionals, even those with good credit scores and big cash down payments, are having difficulty persuading lenders to give them mortgage loans.

Income for self employed doctors, lawyers, accountants, and real estate professionals are often understated because of large business-related tax deductions.

In the past, most self-employed people took out “stated-income loans,” which don’t require income documentation. But in the aftermath of the housing boom, these loans have a bad reputation. Dubbed “liar loans,” they were misused by some people to borrow more than they could afford.

Self-employed borrowers who also want jumbo loans are facing even greater challenges. Jumbo-loan originations declined 71 percent to $87 billion in the first nine months of 2008 from $303 billion during the same period last year, according to Inside Mortgage Finance.

Source: The Wall Street Journal, Nick Timiraos and Ruth Simon (12/01/2008)