Unemployed people can’t pay their mortgages.  Unemployment is up, and so is mortgage delinquencies:

The pace at which people fell behind on their mortgages slowed during the summer for the third consecutive quarter, but the overall delinquency rate hit another record, a new report shows.

For the three months ended Sept. 30, 6.25 percent of U.S. mortgage loans were 60 or more days past due, according to credit reporting agency TransUnion.
That’s up 58 percent from 3.96 percent a year ago.

Being two months behind is considered a first step toward foreclosure, because it’s so hard to catch up with payments at that point.

CNBC quotes F.J. Guarrera, vice president of TransUnion’s financial services division who said:

Two things must get better before mortgage delinquency rates start reversing themselves, he said: home values and unemployment. "Until we see improvement in both of those areas, it’s possible that it will take longer for delinquency to improve," Guarrera said.

Guarrera said he doesn’t expect declines until the middle of 2010.

Guarrera is overly optimistic.  You don’t fix a mess like this in only six months.  Home prices are still out of whack and improving employment is not on the horizon.