A New Foreclosure Wave Hits The Jobless

[Mrs. Sharon B. Hodge]

A New Foreclosure Wave Hits The Jobless



Foreclosure Hits Unexpected Nov 28, 2008
A new wave of homeowners who pay their mortgages on time are now facing foreclosure after losing their jobs in the slumping economy Ben Tracy has more

***********************************************
A New Foreclosure Wave Hits The Jobless
***********************************************

People With Traditional Mortgages Who Have Lost Their Jobs Are Now Facing Foreclosure

CBS Evening News:
Nov 28, 2008

http://www. cbsnews. com/stories/2008/11/28/eveningnews/main4637578...

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," Jones says