The nation's largest mortgage lender, Countrywide Financial, reports more borrowers - including those with good credit - falling behind in their payments, the New York Times says this morning.
Countrywide said its customers who are falling behind on payments appear to have lost jobs, had a divorce or fallen ill. Many are living in homes that are no longer worth what they were when the loan was made and cannot refinance because lenders have become stricter.Moral? Don't lose a job, get divorced or get sick, ya here?
Foreclosures are up in California, according to the Los Angeles Times, reporting an 799% increase over his period last year. Foreclosures are moving beyond the predatory loans (read: sub-prime) common among low-income borrowers, and are beginning to hit the middle class:
"The economy will bend further under the weight of the mounting housing and mortgage problems, but it will not break," said Mark Zandi, chief economist at Moody's Economy.com.Whew, that makes me feel better.
That's what passes for optimism these days. Others are more downbeat.
"All the artificial stimulus housing gave the economy is going to go away," said Rich Toscano, a financial advisor with Pacific Capital Associates in San Diego who runs the popular Piggington.com real estate website. "There will be individual pain for people who made the wrong decisions. We all may end up in a recession."
The good news, as seen by Toscano: "I don't envision a 'Grapes of Wrath' scenario where we all have to pile in the family car and look for harvesting work."