The Downward Multiplier Process Kicks in...
Matthew Goldstein:
Unemployment spreads distress in U.S. home loans | Reuters: the source of the mortgage trouble has swung from lax lending standards to unemployment. Some of the areas with the most severe foreclosure activity have started to show improvement as price cuts and first-time buyer tax credits lure purchasers. With the unemployment rate near a 26-year high and many employers cutting wages, more consumers in areas that were initially spared in the foreclosure explosion are now behind in their home loan payments.
More than 20 percent of areas with above-average foreclosure activity were in Oregon, Idaho, Utah, Arkansas, Illinois and South Carolina in the first half of the year. That shift points to growing unemployment more than to fallout from subprime and adjustable-rate loans, RealtyTrac said in its midyear metropolitan foreclosure market report. While total foreclosure activity kept rising, "some of the markets that had the highest saturation of foreclosures over the past few years have seen declining rates, while new markets like Provo, Utah, and Boise, Idaho, have seen large increases," James J. Saccacio, chief executive officer of RealtyTrac, said in a statement. "As unemployment rates increase in different parts of the country, it's very likely that we'll see similar patterns develop elsewhere," he said....
"As unemployment rises, we are seeing a change in the financial profile of the people seeking our help," Suzanne Boas, president of Consumer Credit Counseling Service of Greater Atlanta, said this week. "We are serving an increasing number of people who work in professional services and skilled trades," she said. "These people have maintained solid incomes their entire lives, but are now in financial trouble and are reaching out for counseling to help avoid foreclosure." In June, 72 percent of homeowners who got foreclosure prevention counseling from the agency, which serves all 50 states...
