Prime Mortgage Delinquencies Soaring
November 29th, 2008Via: CBS News:
“The foreclosure crisis began mostly as a problem for lower income households,” says Mark Zandi of Moody’s. “It is now a problem for all households: low, middle income and even higher income households.”
More than 2 million prime mortgages, traditional loans for people with good credit, are now delinquent. That’s 624,000 more than this time last year, according to the mortgage bankers foundation, Tracy reports.
“We didn’t necessarily expect the distress levels that we are seeing at this point,” says economist Mark Fleming.
It used to be if you couldn’t afford your mortgage you could always try to refinance or sell your home and pay off your loan. But these days, for a lot of people, those options no longer exist.
That’s because 12 million households now owe more than their homes are worth, according to Moody’s.
Homeowners with risky adjustable rate mortgages are getting help from banks, but there are no programs to aid those who already have good loans but no jobs.
“I wake up in the middle of the night thinking about it,” says Terri Osier, a struggling homeowner.
Meanwhile, Judy Jones is hoping her bank will lower her payments until she finds work.
“If they don’t, I’m not going to drain my savings, I am not going to drain my 401k, I am going to walk away,” Jones says.
