'Safe' mortgages going bust, too - Democratic Underground

mfcorey1

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Thu May-20-10 07:00 AM
Original message

'Safe' mortgages going bust, too

Alarming new data show more than a third of new foreclosures targeted fixed-rate mortgages held by borrowers with high credit scores.
By KEVIN G. HALL
McClatchy News Service
WASHINGTON -- Aftershocks from the nation's financial crisis continue rumbling through the housing sector as fixed-rate mortgages held by the safest borrowers accounted for nearly 37 percent of new foreclosures during the first three months of this year, the Mortgage Bankers Association reported Wednesday.

Additionally, more

http://www.miamiherald.com/2010/05/20/1638106/prime-loans-going-bust-too.html

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hobbit709

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Thu May-20-10 07:09 AM
Response to Original message

1. Gee, you think the unemployment rate has anything to do with that?

I know several people who are struggling because they went from a two income to a one income household.

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Bonhomme Richard

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Thu May-20-10 07:58 AM
Response to Reply #1

6. Unemployment and the health care racket. n/t

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customerserviceguy

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Thu May-20-10 08:32 AM
Response to Reply #6

9. Also, you have to look at the swooping decline in housing values

Even if you still have a high credit score, a fixed rate mortgage, and your job intact, are you really going to want to pay off that $400K mortgage on the house that you bought for $500K, that is now worth $300K, and headed soon for $250K? You'd have to have many, many years of old-fashioned real estate inflation to even get back to the $400K, and by the time that happened, the foreclosure would have disappeared from your credit report.

People without the traditional reasons to walk away from a home are doing that. It's happening in the commercial and apartment markets, too. I see it in my job everyday.

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Dr.Phool

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Thu May-20-10 07:10 AM
Response to Original message

2. One consequense of the Bankruptcy Reform Act.

Credit Card delinquencies are down, because CC's can't be easily discharged in bankruptcy any more. People who are going bust are paying that debt off, and letting the house go down the tubes.

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PA Democrat

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Thu May-20-10 07:35 AM
Response to Original message

3. It's still possible to do everything right and still end up

losing your home. Loss of a job, medical expenses not covered by the corrupt health insurance profiteers, etc. can affect anyone.

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Dappleganger

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Thu May-20-10 07:37 AM
Response to Reply #3

4. Shhhhhh...

don't let the republicons hear you say that!

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leftofcool

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Thu May-20-10 07:56 AM
Response to Original message

5. That is because those 37% ers bought more home than they needed

Just because your credit score and income says you can purchase a 500K home does not mean you actually need it or can really afford it. Not all things are equal when it comes to job loss, best to consider all scenarios (job loss, sicknes etc...) before you sign on the dotted line.

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Barack_America

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Thu May-20-10 08:03 AM
Response to Original message

7. We've been hearing about this for months.

People are finding that they owe much more than their homes are worth and are (perhaps wisely) deciding to default rather than continue to pump money into a bad investment.

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leftofcool

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Thu May-20-10 08:08 AM
Response to Reply #7

8. The problem is, one should never look at a home as an

investment, but rather see it as a home/house/place to relax/shelter. The minute you purchase a home as an investment is the very minute you lose since houses go up and down in value all the time. People who are buying homes today in todays market are mostly looking at homes as homes for a lifetime not something they can purchase and sell in 5 years.

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