Heads UP to Shrub! It's the economy, stupid!
"Unexpected troubles are puncturing the American dream for increasing numbers of people nationwide.
It’s the flip side to the happy homeowner scenario: Even with mortgage rates at record lows, mortgage delinquencies are increasing and home foreclosures have climbed to all-time highs.
According to data released this month by the Mortgage Bankers Association of America, 0.4 percent of loans entered foreclosure in the second quarter and another 1.23 percent were still in the process — both unprecedented in the 30 years the group has been keeping track.
The biggest culprit: rising unemployment, with sinking stock portfolios, illness and easy financing all contributing.
The north-central United States, including layoff-hit manufacturing areas, topped all regions with 0.47 percent of loans entering foreclosure in the second quarter.
But the trend has left no area untouched. The South had the most mortgage problems as measured by payments 90 days or more overdue, nearly 1 percent, while Nevada, Pennsylvania and Utah were among other trouble spots.
All types of borrowers have succumbed — from six-figure earners who defaulted on $300,000 jumbo loans to middle-income couples buried in credit-card debt to first-time homebuyers taking advantage of low rates to squeeze into a house.
The mortgage group’s chief economist, Doug Duncan, says the main reason is the recession, which cost 1.8 million jobs and shrank many paychecks as overtime fell |
