"Mortgage brokers pushed exotic mortgage products that allowed people to buy houses that only made sense if prices kept rising. Now that houses have stopped appreciating, people are going to lose their homes and their savings."
A major sign that broader trouble could be brewing emerged Tuesday after a national survey by the Mortgage Bankers Association showed a soaring number of homeowners failing to make their mortgage payments in the last three months of 2006. The group also reported that foreclosures on all homes leaped to the highest level in nearly four decades.
Where the Wolf Comes Knocking
Areas Already in Economic Distress Feel Rise in Housing Foreclosures Most
By David Cho and Nell Henderson
Washington Post Staff Writers
Thursday, March 15, 2007; D01
The big question is: How bad will it get?
So far, the rising mortgage defaults that panicked markets this week have been concentrated in areas of the country already reeling from layoffs in the automobile industry and in hurricane-stricken states on the Gulf Coast.
In Mississippi and Louisiana, about 1 in 10 homeowners are failing to make their payments, fresh data show. Ohio, Michigan and Indiana, the nation's industrial heartland and the states suffering the country's highest unemployment, aren't far behind.
Yet the repayment of mortgages is holding up well on the Atlantic and Pacific coasts and in other parts of the country, including those that saw huge run-ups in property values in recent years.
Not only that, but there is scant evidence -- so far -- that the mortgage problems are causing wider economic damage. But the big worry, on Wall Street and on Main Street, is that the trouble will spread, worsening the downturn in the housing market and possibly tipping the economy into a painful recession.
"The question now is whether the pathology of the housing market is going to infect the rest of the economy," said Edward E. Leamer, director of the Anderson Forecast at the University of California at Los Angeles. "We're optimistic about the economy . . . [but] it's going to feel like a depression in the housing sector."
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But you know the solution is
that if you cannot pay your mortgage, you can enlist in the reserves and head over to iraq to live for awhile...you can go as a couple and leave your children with a crystal meth gang. all of you should be just fine in about five or six years...the way i see it, your kids will either be dead, locked up or kingpins - and you can live off of them for a while - until they force you to hold up your end by selling something you thought was yours and only yours.