Post by shortcircuit on Nov 30, 2008 16:35:44 GMT -4
Source: CBS
There's a new wave of foreclosure sweeping across the country, and the people who are getting swept up are not greedy investors, or people who got in over their heads with bad loans, reports CBS News correspondent Ben Tracy. Rather, the crisis is hitting home for those who never expected to be in trouble until the slumping economy put them out of work.
As a code enforcer, Judy Jones' job was to make sure foreclosed homes, often trashed by owners on their way out the door, got cleaned up. With a government job, good credit, and a 30 year fixed rate loan on her southern California house, Judy never planned on taking her work home.
But last month she was laid off, joining a new wave of homeowners who paid their mortgages on time but now can't because they're out of work.
"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,"
There's a new wave of foreclosure sweeping across the country, and the people who are getting swept up are not greedy investors, or people who got in over their heads with bad loans, reports CBS News correspondent Ben Tracy. Rather, the crisis is hitting home for those who never expected to be in trouble until the slumping economy put them out of work.
As a code enforcer, Judy Jones' job was to make sure foreclosed homes, often trashed by owners on their way out the door, got cleaned up. With a government job, good credit, and a 30 year fixed rate loan on her southern California house, Judy never planned on taking her work home.
But last month she was laid off, joining a new wave of homeowners who paid their mortgages on time but now can't because they're out of work.
"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,"