A16
Decline in foreclosures likely to be temporary
High unemployment could curb rebound in mortgage delinquencies
BY FRANK AHRENS Foreclosures and late pay-
ments on home mortgages dropped slightly in the second quarter of this year, but sustained high unemployment and a stalled economic recovery could make the improvement short-lived. Although one in 10 mortgages
in theUnited States is still behind by at least one payment, the num- ber of “seriously delinquent” loans—those that are at least 90 days late — dropped compared with the first three months of this year, theMortgage Bankers Asso- ciation said Thursday. Also, the percentage of homes
in foreclosure dropped to 4.57 percent in the second three months of this year, compared with 4.63 percent in the first quarter. However, the number of seri-
ously delinquent mortgages is still higher than it was during the comparable period last year. “When I’m asked, ‘Are things
getting better or worse?’ my an- swer is like most things these days,”Mortgage Bankers Associa- tion chief economist Jay Brink- mann said in a conference call Thursday. “It is a combination of good news and not-so-good news. And there are areas of concern even with the good news.” The nation’s foreclosure and
mortgage-delinquency statistics are dominated by depressed mar- kets in the “sand states:” Nevada, Arizona, California and Florida. In the second quarter of this year, California had 13.2 percent of all outstanding mortgages and 14.7 percent of all foreclosures, the association said. The positive numbers are the
result of three shifts, Brinkmann said.Last year, therewasadropin the number of mortgages that were only one payment past due,
Brinkmann said. Moving to this year, that means the number of mortgages that are several pay- ments past due has decreased. However, the association has seen a recent uptick this quarter in newdelinquencies. Second, a number of homes
with distressed mortgages have been sold, thanks to the federal homebuyer tax credit. But when that credit expired at the end of April, home sales predictably tumbled, with sales last month of previouslyownedhomeshitting a 15-year low. Third, some of the mortgage-
relief programs appear to have worked, chiefly those engineered by banks in the private sector. Government efforts to keep trou- bled homeowners from default- ing on their mortgages have had little effect. President Obama’s signature mortgage-relief plan has a dropout rate of nearly 50 percent, the government report- ed last week.Historically,40to60 percent of all reworked mortgag- es fall back into delinquency, Brinkmann said. The State Foreclosure Preven-
tionWorking Group, a collection of state attorneys general and state banking regulators, said this week that homeowners who had recently reworked their troubled mortgages were faring better than those who did so earlier during the financial crisis, giving hope that a second wave of mass defaults can be avoided. Brinkmannsaid that the report provided “cautiously optimistic news” about the mortgage mar- ket but that as long as unemploy- ment remains near 10 percent, Thursday’s good news will proba- bly be short-lived. “A number of us are having to
rethink our forecasts based on numbers that have come in in the past month or so,” Brinkmann said, referring to last week’s high- er-than-expected new jobless claims, the stock market’s dismal performance this month and downgrades in estimated eco- nomic growth for the year.
ahrensf@washpost.com
EZ SU
KLMNO WASHINGTON BUSINESS Domestic travelerswin on airfares
Competition among area's airlines remains tight, data show
BY DEREK KRAVITZ Competition for domestic pas-
sengers is still tight among the Washington region’s airlines, leading to lower fares for travel- ers, according to an analysis of last year’s federal airport data. The analysis of annual U.S.
Department of Transportation travel data, prepared by a consul- tant for the nonprofit Washing- ton Airports Task Force and re- viewed by The Washington Post, shows that the proposed merger between United and Continental airlines is expected to increase competition, allowing for more international trips out of the re- gion’s three airports: Dulles Inter- national, Reagan National and Baltimore-Washington Interna- tionalMarshall. “It will help us expand and
increase our international mar- ket share in this region,” said Leo Schefer, president of the task forceanda longtime British Aero- space executive. “They will have a stronger system to feed their in- ternational hubs now.” The merger will probably in-
crease the number of flights be- tween Washington and Latin America, said William S. Swelbar, a research engineer at MIT’s In- ternational Center for Air Trans- portation. About 97 percent of the more
than 37 million domestic travel- ers flying to or from National, Dulles and BWI had a high level of competitive choice for their business — no one airline held more than 80 percent of any one connecting airport’s travelers. Only a few route monopolies
remain nationwide out of the Washington region: Southwest has an 81 percent share of flights between BWI and Providence, R.I., and it controls routes to and from Islip, Long Island, while Delta handles 85 percent of those travelingbetweenDullesandCin-
MARVIN JOSEPH/THE WASHINGTON POST
Travelers navigate a busy BWI. The data showed that no one airline held more than 80 percent of any one connecting airport’s travelers.
cinnati. Only four smallmarkets lacked
competition, when other airports within an hour’s drive were taken into account: Grand Rapids, Mich.; Lansing, Mich; Panama City, Fla.; and Wilmington,N.C. Low-fare carrier Southwest is
still Washington’s largest domes- tic carrier, with more than 8.2 million passengers at BWI and
Dulles. After its October 2008 merger with Northwest, Delta moved into second place, with 6.1 million passengers at all three airports.United fell to third, with a little more than 6 million do- mestic travelers; U.S. Airways was fourth with 5.2 million pas- sengers; and American Airlines was fifth with almost 3.7 million passengers at the three airports.
Despite mergers and increased
competition over landing and takeoff slots at the region’s air- ports, several newer airlines have been able to enter the Washing- ton market and thrive. Last year, Virgin America be-
came the second-largest carrier between San Francisco and the Washington region. “This is still a very competitive
area. United is the big dog at Dulles,U.S. Airways is the biggest at National, and Southwest is the largest at BWI,” said Michael Morstein, director of route plan- ning and analysis at InterVISTAS Consulting, an industry analyst in Washington. “There is a lot of mixing and matching, with pas- sengers choosing different air- ports regardless of where they live.” The highest average fare for
domestic routes with more than 50,000 passengers a year was for United’s flights between Dulles and Honolulu International Air- port,whichtypically requiredone layover and cost about $408 one way. The yield-per-mile for the airline was relatively low, howev- er, and about 13 percent of those passengers — almost 8,000 peo- ple — flew the Honolulu trip for free because of frequent-flier or other programs. The cheapest average fare for
large routes was JetBlue’s BWI- to-Logan International Airport in Boston, about $65. The top-grossing route: Unit-
ed’s San Francisco flights in and out of Dulles. The $259, 2,446- mile trips brought in more than $125 million last year. Nearly 484,000 people flew on those flights, making it the third-most- trafficked route.The top twowere Delta’sNational trips to and from Hartsfield-Jackson Atlanta Inter- national Airport, with almost 591,000 passengers, and South- west’s BWI to and from Orlando International Airport, with more than 510,000 travelers.
kravitzd@washpost.com
FRIDAY, AUGUST 27, 2010
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the Dulles corridor?
Metrorail spark
Will
for tomorrow--a special report on development along the Dulles Metro corridor.
>> Empty buildings today, big plans Monday in CAPITAL BUSINESS
Dow falls below 10,000 for first time since July Poor home sales
and high jobless claims take their toll
BY STEPHEN BERNARD
new york — Stocks fell Thurs- day after early gains from a better report on jobless claims faded in late trading, sending the
Dow Jones industrial average to its first close below 10,000 since early July. The Dow fell 74.25, or 0.7
percent, to close at 9985.81 after having been up as much as 45 points earlier in the day. The market has struggled to hold on to gains in recent trading as many investors remain uncon- vinced that the economic recov- ery will hold. The broader Stan- dard & Poor’s 500 index fell 8.11,
or 0.8 percent, to 1047.22. Stocks have been on a general-
ly downward trend in August after charging ahead in July. A bevy of poor indicators on the economy, especially weak home sales, has pierced a sense of optimism brought by strong cor- porate earnings reports last month.TheDowhas falleninfive of the past six trading sessions, shedding 430 points over that time. The market enjoyed a brief
reprieve early Thursday thanks to an encouraging sign from the Labor Department. It reported that first-time claims for jobless benefits fell last week after three straight weekly increases. Investors will be watching a
speech Friday by Federal Reserve Chairman Ben S. Bernanke for clues on just how weak the U.S. economy really is and whether the central bank plans to take more steps to revive it. Peter Cardillo, chief market
economist at Avalon Partners, said the market wants to see whether “the pulse of the Fed is beating at a fast ratewith anxiety over the economy.” First-time claims for unem-
ployment benefits dropped to 473,000 last week, a bigger drop than analysts expected. First- time claims had jumped theweek before, going above 500,000 for the first time since November. The latest jobless claims re-
port suggests that hiring remains weak. In a healthy economy, weekly claims usually fall below 400,000. At the height of the recession in March 2009, weekly claims peaked at 651,000. Prices on Treasury securities
rose, sending interest rates low- er, after the glow from the posi- tive report on jobless claims waned. The yield on the 10-year Treasury note dipped to 2.48 percent, from 2.54 percent late Wednesday. Its yield helps set interest rates on mortgages and other consumer loans. Long-term bond yields are
hovering at levels not recorded since early 2009, when the coun- try was in the depths of the recession and stocks hit 12-year lows. European markets got a lift
froman improved consumer con- fidence reading on Germany’s economy. Germany’s DAX index rose 0.2 percent. France’s CAC 40 climbed 0.7 percent and Britain’s FTSE 100 rose 0.9 percent. — Associated Press
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