WashPost: Mortgage foreclosure rates jump
Last week Michael Tortorello posted about the Wall Street Journal's increasing restiveness over the state of the housing market, and on Monday the Washington Post's Michael Powell chimed in with more bad housing news:
Foreclosure rates rose in 47 states in March, according to Foreclosure.com, an online foreclosure listing service. The rates in Florida, Texas and Colorado are more than twice the national average. Even in New York City and Boston, where real estate markets are white-hot, foreclosures are rising in working-class neighborhoods....
Should the nation's housing bubbles deflate, as many economists and federal officials expect, the foreclosures could prefigure a national crisis. Americans now shoulder record levels of housing debt -- more than 8 percent of homeowners spend at least half their income on their mortgage. [Read the rest.]
Culprits examined by Powell: Adjustable-rate and interest-only mortgages that get people into houses they can't afford, catastrophic medical expenses. Unindicted co-conspirator: all the home-equity drawdowns during the recent era of high prices and low interest rates, which have propped up consumer spending and piled on additional debt that could turn into a "negative equity" epidemic if the market declines.