As job losses rise, growing numbers of American homeowners with once solid credit are falling behind on their mortgages, amplifying a wave of foreclosures.
Problems Grow for Prime Borrowers
In the latest phase of the nation’s real estate disaster, the locus of trouble has shifted from subprime loans — those extended to home buyers with troubled credit — to the far more numerous prime loans issued to those with decent financial histories.
With many economists anticipating that the unemployment rate will rise into the double digits from its current 8.9 percent, foreclosures are expected to accelerate. That could exacerbate bank losses, adding pressure to the financial system and the broader economy.
“We’re about to have a big problem,” said Morris A. Davis, a real estate expert at the University of Wisconsin. “Foreclosures were bad last year? It’s going to get worse.”
Economists refer to the current surge of foreclosures as the third wave, distinct from the initial spike when speculators gave up property because of plunging real estate prices, and the secondary shock, when borrowers’ introductory interest rates expired and were reset higher.
“We’re right in the middle of this third wave, and it’s intensifying,” said Mark Zandi, chief economist at Moody’s Economy.com. “That loss of jobs and loss of overtime hours and being forced from a full-time to part-time job is resulting in defaults. They’re coast to coast.”
Those sliding into foreclosure today are more likely to be modest borrowers whose loans fit their income than the consumers of exotically lenient mortgages that formerly typified the crisis.
Economy.com expects that 60 percent of the mortgage defaults this year will be set off primarily by unemployment, up from 29 percent last year.
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You're ripping my heart out.
ReplyDeleteThat is my dad.
ReplyDeletebla bla bla same old sheeet end of the world bla bla bla
ReplyDeleteI plan on boating, vacation this summer just as I have every summer before and will not let all this popycock get me down
#3 we need sheep like you believing every thing will be OK.
ReplyDeleteWho's the J-w in the picture?
ReplyDelete#4 - I disagree. Apathetic lemmings are what got us into this mess. They are just too naive to see where all this is headed. The last thing this country needs is more sheep.
ReplyDeleteI'm going to load up my boat, drag it on out to the lake in my hummer all summer, cranking Hotel California, get laid, smoke weed, and listen to some bad indie music.
ReplyDeleteSend your bills TO Elaine Chao, dimwit former US Labor Secretary THROUGH Mitch McConnell, R-Ky, her husband.
ReplyDeleteLet them worry about the embarrassing sacksk of mail Mitch is known to receive.
#5 You disagree because you don't understand. You don't get understand the Government borrowed trillions and can't pay it back EVER, You don't get that the Government is corrupt, holding the stock market up by printing fake money and propping it up. You don't understand that the Federal Reserve is a private company that is criminal in nature making up printed paper and distributing it to lemmons like you do go into debt forever making them slaves of the state..Its lemmons like you that just don't unnderstand. They need people like you who don't understand..
ReplyDeleteSome people say things just to get a rise out of other people. Others bury their heads in the sand and try to tune out what is really going on around them. A very small percentage of people can actually handle the truth.
ReplyDelete^^^ You called it ^^^ Perfect
ReplyDelete90% call for recovery this year (USA Today propaganda front page). Not they are just being a little bit to obvious. All these so-called economists are reading from the same MSM script.
ReplyDeletePeople are not that dumb enough to believe it is over. Look at the comments under that USA TODAY article. Everyone is calling it BS.
ReplyDeleteThe people calling it BS are a very small percentage of America as a whole. While many people may see that things aren't getting any better they still may not see the entire truth that America as a first world nation is finished.
ReplyDeleteLots of people think this is just a run-of-the-mill recession/depression and that in time things will improve.
Anyone paying attention realizes how bad of straits America is in right now and sees the coming financial collapse.
America is finished. There is no going back to how things were before. We are a police state-in-training and just a single event away from all out martial law.
That is what people do not believe. Most just don't have the mental capacity to think freely and see the bad things at the door. BUT there are quite a few people starting to see things aren't right which is great but it is still a small percentage compared to those who cannot/will not/refuse to see.
i've got guns, i've got ammo, i've got months of food and plenty of beer. i also have a new motorcycle to ride :] I have prepared enough and will continue to live my life in happiness. However if TSHTF, I'm ready, but I'm not going to worry anymore about it.
ReplyDelete... Some have already headed for the hills with whiskey and gunpowder 'cause recession is over; now begins the depression.
ReplyDelete