Despite Talk Of Recovery, Long Recession Is Taking Toll On The Most Credit-Worthy Borrowers

[Amerigo Vespucci]

Source: The Huffington Post

Despite a recent increase in housing prices and the administration's optimistic talk about the "end of a recession," the ripple effects of the mortgage crisis continue to hurt many homeowners.

Even the most credit-worthy Americans are starting to fall behind on their mortgages, according to the Wall Street Journal.

While mortgage-delinquency rates for sub-prime borrowers appear to be holding steady after steep declines, the pace of delinquencies for prime borrowers is on the rise.

The trend doesn't bode well for troubled banks and any current or forthcoming recovery:

Read more: http://www.huffingtonpost.com/2009/09/04/despite-talk-of-recovery_n_277103.html

[Hannah Bell]

1. emphasis on "long". now officially longer than the reagan recession.

[elleng]

2. Of course.

Fools who think this will clear up 'immediately,' for them or others, are just that, fools, like those who think getting changes through congress will happen with the snap of a president's fingers. Join the real world, folks.

[fujiyama]

3. Kinda hard to make the mortgage on time

if you've lost your job, are getting by on unemployment, and paying COBRA for a family.

Couple that with a tendency for many to have borrowed more than they should have in the first place (did so many really need a 3,000 square feet home?) and the seeming inability for Americans to actually SAVE money and well...is anything a surprise? In the case of those that are missing payments with good credit, they are likely those that saved but may have been unemployed for a while. They've probably eaten into savings at this point.

It's time to start teaching people about effectively managing credit in high schools, if indeed we are going to keep it at the center of our economy. Either do that or it's time to cut back on financing just about everything. Many should be discouraged from it. Time for people to actually save and buy what they can afford. It's a scary concept but more people are going that route now.

[notesdev]

4. If you're underwater on your mortgage, the banks have given you no reason to pay

since they won't foreclose, and CAN'T foreclose, because if they do they must then recognize the losses on their books and admit insolvency.

People have already lived a year or more without paying their mortgages and without being foreclosed upon.

The only things restraining people right now are the desire to maintain a credit record and the reluctance to move. But when nobody will lend to you at any reasonable rate regardless of how good your credit is, the incentive to maintain it is diminished.