As long as foreclosures keep climbing, the housing market will be poisoned with bank owned properties. Now it's not just sub-prime or ARM borrowers that are defaulting but the average American with solid credit who are now driving up foreclosure numbers. See the following article from Mortgage Roadmap that discusses the worsening foreclosure epidemic.
The news on housing foreclosures isn't getting any better. In fact, it's getting worse.
According to a story in the Wall Street Journal, one in every eight U.S. households with mortgages was either in foreclosure or behind on its mortgage payments in the second quarter of this year.
The most frightening thing about these new numbers is that many of these foreclosures on on households with good credit that took out safe, conservative mortgage loans.
The national economy, of course, is the culprit here. Too many people have lost their jobs during this economic slump. And they're not able to find new ones. Suddenly, a mortgage payment that was doable during good times is an impossibility.
The bottom line, unfortunately, is that the foreclosure crisis won't ease until the nation's unemployment rate starts seriously dropping. Homes became far too expensive during the recent housing boom. This means that mortgage loans, and the monthly payments that come with them, took up a greater percentage of homeowners' monthly income.
We are now seeing the results: When the economy is sailing along, and jobs are plentiful, homeowners can make their mortgage payments. When a bump occurs, though, and jobs start disappearing? Those mortgage payments are far out of reach for too many homeowners.
This article has been republished from The Mortgage Roadmap.