An astonishing one in seven US mortgages are in foreclosure or delinquent; even those with safe credit ratings are losing homes.
That is a consequence of the falling job market but even so, Americans with solid credit ratings comprised 33% of the quarter’s foreclosures.
Many are victims of the so-called ‘subprime’ mortgages which had escalating payments that ultimately (and predictably) became unaffordable.
Worsening the problem,” reports the Globe and Mail, “millions of unconventional mortgages issued to Americans who didn’t even have to prove they had a job are due to reset in the next two years, further harming the sector’s prospects.
“The stability we’ve started to see in U.S. housing was likely a false calm before a bigger storm,” said Derek Holt, vice-president of economics for Scotia Capital. “There are millions of homeowners under threat of losing their homes in the next two years.”