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updated 8/20/2009 3:55:53 PM ET 2009-08-20T19:55:53

With the recession throwing thousands of people out of work daily, more than 13 percent of American homeowners with a mortgage have fallen behind on their payments or are in foreclosure.

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The record-high numbers released Thursday by the Mortgage Bankers Association are being driven by borrowers with traditional fixed-rate mortgages, rather than the shady subprime loans with adjustable rates that kicked off the mortgage crisis. As of June, more than 4 percent of all borrowers were in foreclosure, while about 9 percent had missed at least one payment.

And the layoffs keep coming. Lockheed Martin Corp. said this week it’s handing out about 800 pink slips in its space systems division, and audio conferencing company Polycom Inc. said it will cut about 80 positions.

New jobless claims rose last week to a seasonally adjusted 576,000, the Labor Department said Thursday. While the recession, measured by the nation’s total economic output, is likely over, most economists expect layoffs and foreclosures to keep rising for many months as companies remain in cost-cutting mode.

“Their confidence has been shattered,” said Brian Bethune, chief U.S. financial economist at IHS Global Insight. “They are going to be very conservative. They don’t want to be blind-sided by a false dawn economy.”

Nee Salam, 56, lost his engineering job at an automotive electronics supplier south of Atlanta more than a year ago.

At the time, he said, “I was thinking the job market was going to change right away.” But it hasn’t.

Since then, he’s been working as a consultant, earning less than half his old salary of $115,000. His wife has been cleaning houses to keep the family afloat.

But after draining their savings and retirement accounts, the couple have missed four payments on their $636,000 mortgage. Their request for a loan modification from OneWest Bank (formerly failed IndyMac Bank) was denied because the couple’s income was too low. A OneWest representative did not immediately comment.

As banks unload foreclosed properties at deep discounts, they are attracting homebuyers back into the market. On Friday, the National Association of Realtors will release July home sales data, and economists expect it to show the fourth-straight monthly sales increase.

While there have been signs that prices are stabilizing, some economists say that’s a temporary respite. “We don’t think we’ve seen a bottom yet in home prices because of the foreclosure problem,” said Michelle Meyer, an economist with Barclays Capital.

The worst of the trouble is still concentrated in California, Nevada, Arizona and Florida, which accounted for 44 percent of new foreclosures in the country. Nearly 12 percent of all loans in Florida were in foreclosure, the highest in the country, followed by Nevada at 9 percent.

Loan delinquencies among borrowers with prime, fixed-rate mortgages grew from the first quarter to the second in all 50 states, with the biggest jumps in Wisconsin, Illinois, Utah and West Virginia.

President Barack Obama has pledged to fight the problem, but its foreclosure prevention program, known as “Making Home Affordable,” is off to a disappointing start. As of July, only about one in 10 of eligible borrowers had signed up.

When homeowners don’t have much income left, there’s little that can be done to help. Cindy Kennedy, 44, ran a successful cleaning business in Allentown, Pa., for seven years. But she lost most of her customers once the recession hit.

Kennedy paid more than $1,700 to a California company that promised to help modify the loan. But the company stopped returning her calls in June, and she suspects she has been scammed.

She and her longtime companion stopped paying on their $840-a-month mortgage in February and their house has gone into foreclosure. They attended a mediation conference in county court Wednesday with their lender but are not optimistic about saving their home.

Now making $120 a week as a part-time supermarket cashier, Kennedy says she commiserates with her co-workers, some of whom are also facing foreclosure.

“We talk about it and laugh,” she said. “It’s not really a funny situation, but sometimes you have to laugh to keep your sanity, so you don’t make yourself nuts.”

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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