U.s. Mortgage foreclosures fall on employment gains

Mortgage foreclosures declined in the first quarter from a record high as U.S. employment and personal income rose, a sign the economic recovery may be helping to limit defaults.

The share of home loans in foreclosure fell to 4.52 percent from 4.64 percent in the prior three months, the Mortgage Bankers Association said in a report today. New foreclosures slid to 1.08 percent of loans from 1.27 percent.

American household budgets are improving as employment increases, wages rise and consumers limit new debt. More than 500,000 workers got jobs during the first quarter while U.S. personal income gained 2.1 percent, according to Labor Department and Commerce Department data. A Federal Reserve gauge tracking the amount of disposable income going to mortgage and credit card bills shrank to a 12-year low at the end of 2010.

“As the economy has improved, as job creation has improved, we are beginning to see that reflected in the foreclosure numbers,” Jay Brinkmann, chief economist of the Washington-based mortgage bankers group, said in a telephone interview. “Real estate markets reflect what’s going on in the rest of the economy.”

Source: BusinessWeek.com