Wages in the region slightly up; what’s the benefit in this?
The survey is proprietary, and Carolyn Fowler of HR Diversified Solutions warns the Hook that even if we pony up $200 for a copy of the report, publishing the information is strictly forbidden.
The projected foreclosure rate — higher than during the oil bust of 1987 but not as high as in the 2002 recession — poses a significant threat to the housing sector, and possibly to the nation’s economy if it spurs consumers to maintain a tight grip on their wallets. “Falling home prices hurt consumer spending,” says Patrick Newport, an economist at consulting firm Global Insight.
The problem can be traced in large part to consumers who took out adjustable-rate mortgages that had low initial rates but which adjusted higher after two years to a rate that was significantly higher than they expected or could afford. Many of those consumers weren’t aware that initial mortgage rates on such loans often are tied to long-term interest rates, which haven’t changed much in the past several years. But adjustments are tied to changes in short-term rates, which the Federal Reserve has boosted 17 times since 2004. (italics mine)
The trend can put neighborhoods at risk. Houses left vacant as the result of foreclosures tend to push property values down and cause neighbors that can afford to do so to sell out and move away, creating a snowball effect.
The company in an e-mail said it ended on Friday retail offerings of so-called 2/28 loans, which at 65 percent of all subprime mortgages last year are the staple of the industry. Payments on 2/28 adjustable-rate mortgages (ARM) are based on rates that are fixed for two years and then are adjusted twice a year for the remaining 28, if the loan is not refinanced.
And perhaps my favorite post of the day – Why 90% of Realtors Fail