Home foreclosures, job losses expected to continue to rise
Despite mortgage rates below 5 per cent and signs that home prices have bottomed out in some places, executives and economists are decidedly downbeat about the US mortgage industry as well as the housing market it depends on.
The Mortgage Bankers Association said Tuesday that it expected US home foreclosures to continue to rise before leveling off late next year. The reason: Job losses have replaced subprime loans as the main cause of defaults.
Jay Brinkmann, the group’s chief economist, predicted that unemployment would rise through next summer, causing delinquencies to rise.
And because of the loss of income, he said, it will be increasingly difficult to keep troubled borrowers in their homes by modifying their loans. Continue reading
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