Foreclosure woes mount for those with good credit

AP via Yahoo!:



Foreclosure woes mount for those with good credit
By J.W. ELPHINSTONE, AP Real Estate Writer


NEW YORK – A record 12 percent of homeowners with a mortgage are behind on their payments or in foreclosure as the housing crisis spreads to borrowers with good credit. And the wave of foreclosures isn't expected to crest until the end of next year, the Mortgage Bankers Association said Thursday.

The foreclosure rate on prime fixed-rate loans doubled in the last year, and now represents the largest share of new foreclosures. Nearly 6 percent of fixed-rate mortgages to borrowers with good credit were in the foreclosure process.

At the same time, almost half of all adjustable-rate loans made to borrowers with shaky credit were past due or in foreclosure.

The worst of the trouble continues to be centered in California, Nevada, Arizona and Florida, which accounted for 46 percent of new foreclosures in the country. There were no signs of improvement.

The pain, however, is spreading throughout the country as job losses take their toll. The number of newly laid off people requesting jobless benefits fell last week, the government said Thursday, but the number of people receiving unemployment benefits was the highest on record. These borrowers are harder for lenders to help with loan modifications. .........(more)

The complete piece is at: http://news.yahoo.com/s/ap/20090528/ap_on_bi_ge/us_foreclosures

And way higher than I heard reported earlier. Too bad the author didn't footnote the article's assertions.

In the Bush I recession, it took awhile for people who had just bought overpriced homes to do the math. Wealthy people, as a rule, started dumping upside properties immediately. Sam and Sally Suburbia had to be convinced it wouldn't be the end of the world for their credit if they did this. But when a developer is offloading the same townhouse you just paid $400,000 for for $225,000 you really have to ask yourself how long it would take for you to get back to even. That doesn't make it right, but business decisions aren't always ethical decisions.

with the highest examples of predatory lending? I mean laws that favor lenders?

That is amazing. I have a 700 credit score and I had my payment go up 77 a month. Credit card issuers are lowering limits and increasing rates. Sad!

All 3 off my credit cards limits have been lowered.

I only owe very little on one of them.

Aren't "being in foreclosure" and "having good credit" mutually exclusive?