| Unemployment is now the cause of almost half of | | | | step in and help people keep their homes averting |
| all foreclosures on conventional mortgages, raising | | | | foreclosure sounds good, but how do you do that |
| concerns that mounting joblessness will stall any | | | | when the person doesn;t even have an income? |
| housing recovery and could cause more | | | | Tell me, how does that work? Let me answer |
| foreclosures next year. | | | | myself. It doesn't work. And with the |
| The increase in unemployment as a cause is a | | | | unemployment rate soaring, the chances of |
| significant shift from 2007, when foreclosures | | | | averting mroe foreclosures is dropping like a |
| were primarily driven by the large number of | | | | rock. |
| homeowners who had taken on risky loans. Many | | | | Rising unemployment will definitely undermine |
| were first-time home buyers or those who | | | | chances of a housing rebound for months to |
| bought during the housing boom that ended in | | | | come. Potential home buyers are less likely to |
| 2006. | | | | borrow for a home because of uncertainty about |
| Now, layoffs and the recession are playing the | | | | job security. That could keep inventories high as |
| pivotal role in driving mortgage defaults. The 4.3 | | | | unsold homes stay on the market for months |
| million people collecting unemployment is the most | | | | — dragging down home prices. And of cours, |
| since 1974, the Labor Department says. | | | | that's all we need more of now isn't it. |
| During the first half of the year, about 46% of | | | | Add to that the fact that banks are less likely to |
| the 90-day delinquencies on conventional, | | | | lend when unemployment is high. |
| conforming loans were because of a loss of | | | | "Many people have adjustable-rate mortgages |
| income, vs. 36% in 2006, according to mortgage | | | | that they were planning on refinancing," says Elena |
| giant Freddie Mac. | | | | Rivkin Franz, a real estate lawyer in the San |
| Job losses exacerbate the situation for | | | | Francisco area. "Unfortunately, if you don't have a |
| homeowners with risky mortgages. "A subprime | | | | steady stream of income, you can't get a |
| buyer is already more fragile, so when | | | | refinance, or at least an affordable one." Getting |
| unemployment rises, foreclosures go up," says | | | | rid of your ARM (adjustable rate mortgage) can't |
| Freddie Mac spokesman Brad German. | | | | happen if you're unemployed, unless we want to |
| FIND MORE STORIES IN: San Francisco | United | | | | goback into the sub-prime business again. :-( |
| States Labor Department | Freddie Mac | Brad | | | | | A recent study by the National Coalition for the |
| National Coalition | Banks | Homeless | Rick Sharga | | | | Homeless found homelessness rising. It's often |
| of RealtyTrac | | | | hard for displaced workers to find new jobs. |
| Mounting joblessness is also affecting | | | | When they do, the new jobs on average pay |
| homeowners who may have traditional, 30-year | | | | about 13% less than the previous jobs, the |
| conventional loans but are living paycheck to | | | | coalition says. The good news in all of this though |
| paycheck. | | | | is that prices are falling fast. There are some |
| They tend to be more urban, lower- and | | | | great Christmas buys out there- provided one has |
| middle-class blue-collar workers, says Rick Sharga | | | | some money to buy them. |
| of RealtyTrac. | | | | It's called the "snow ball effect", maybe the |
| "It's not going to be pretty," Sharga says. "You're | | | | domino effect. The bottom line is that when stuff |
| going to see whole different regions of the | | | | begins to happen there's not one fix that will take |
| country suffer." | | | | care of it all, in fact that might not any ANY fix |
| There are some things we're not in control of- | | | | at all. |
| many things! To say that the government will | | | | |