Both President Bush and Federal Reserve Chairman Ben Bernanke tried to calm fears late last week. Bernanke pledged the central bank would “act as needed” to limit any adverse economic effects from the market turmoil. Bush announced changes in the Federal Home Administration insured-loan program to help combat the expected wave of foreclosures and also answer attacks from Democrats that his administration has been slow to respond to a growing crisis in mortgage foreclosures. Democrats accused Bush of not going far enough and vowed to push more aggressive legislation through Congress, not only to help homeowners facing foreclosure but also to attack predatory lending practices that they contend led to the crisis. Sen. Charles Schumer, D-N.Y., chairman of the Joint Economic Committee, said the new mortgage delinquency numbers should serve as a wake-up call to Congress and the administration that urgent help is needed. Schumer is seeking $300 million in federal support for nonprofit mortgage counseling groups that he said were “the best defense against the coming storm of foreclosures throughout the country.” Senate Banking Committee Chairman Christopher Dodd, D-Conn., said he would soon introduce legislation to crack down on predatory lending practices. Dodd said the 290,000 additional families who faced the prospect of losing their homes in the spring, according to the MBA data, were “just the leading edge of a tidal wave of foreclosures” likely to occur before December 2008. Private economists warned that the worst slump in housing in 16 years and the turbulence in financial markets from a resulting serious credit squeeze could push the economy into a recession as more borrowers fall into default, dumping even more homes onto an already glutted market. “You have a lethal combination of higher mortgage payments, lower house prices, a weaker job market and more cautious lenders,” said Mark Zandi, chief economist at Moody’s Economy.com. “That is a very noxious mix and it is the reason for this surge in foreclosures.” Zandi put the possibility of a recession at 40 percent, almost four times the possibility he had estimated in July, before the current credit crisis hit. He said defaults will not peak until next year, reflecting a wave of introductory mortgages that are just now resetting from low “teaser” rates. Those resets can in many cases mean an extra $250 to $300 in higher monthly payments on the typical $1,200 monthly mortgage. The MBA survey found that the delinquency rate, which tracks the number of people who are behind in their payments but have not yet entered the foreclosure process, was also up sharply during the spring. It rose to 5.12 percent of all loans, the highest level in five years, and up from 4.84 percent in the first quarter. The delinquency rate for subprime loans increased more sharply to 14.82 percent – up from 13.77 percent – in the first quarter. That marked the second-highest subprime delinquency rate on record after a 14.96percent rate in the spring of 2002. The delinquency rate for prime loans, offered to borrowers with good credit histories, also increased, but by a much smaller amount. It rose to 2.73 percent, up 2.58percent in the first quarter. Doug Duncan, the MBA’s chief economist, said the worsening performance was the result of two major factors – heavy job losses in the Midwest states of Ohio, Michigan and Indiana, a region hard hit by heavy losses in the auto industry and other manufacturing industries, and the collapse of previously booming housing markets in California, Florida, Nevada and Arizona. Analysts said the problems in the formerly red-hot housing markets of California, Florida, Nevada and Arizona reflected, in part, speculators walking away from mortgages they can no longer afford. They had jumped into the market during the boom, hoping to take advantage of rapidly rising prices by quickly reselling. 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! FORECLOSURES: One politician says it is “just the leading edge of a tidal wave.” By Martin Crutsinger THE ASSOCIATED PRESS WASHINGTON – A record number of homeowners got an unpleasant notice in their mailboxes this spring that their mortgages were being foreclosed. The grim prospect is that thousands more of those notices will crop up in mailboxes in coming months as the steepest slump in housing in 16 years contributes to a widening mortgage crisis. More than 2 million families are facing the prospect of seeing their adjustable mortgage payments rise sharply over the next two years, possibly to levels that many will be unable to pay. The largest number of foreclosures and delinquencies have occurred in subprime mortgages, loans extended to people with weak credit histories. But quarterly data released Thursday by the Mortgage Bankers Association indicated the problem is now spreading to other types of mortgages. The MBA report showed the number of homeowners who got foreclosure notices in the April-June quarter hit an all-time high of 0.65 percent, up from 0.58 percent in the first quarter. It marked the third consecutive quarter that a record has been set. The rising defaults in subprime mortgages have roiled global financial markets in recent weeks, sending stock prices on a roller-coaster ride as investors wonder which big bank or hedge fund will be the next to report huge losses from subprime mortgages that were bundled into securities and resold to investors.