But, we knew this already.
Aggressive lending is the real culprit behind high foreclosure rates — not just adjustable-rate mortgages, say many of those who are trying to analyze and cure the foreclosure problem …
… “It is certainly not out of the realm of possibility that even without resets some of the borrowers who took out these loans are ill-prescribed for homeownership,” says Keith Gumbinger, vice-president of mortgage-research firm HSH Associates.
What was the statistic we all read last year? That the city of Boston’s Department of Neighborhood Development estimated that 60% of loans going into foreclosure did so, prior to the loans’ first reset?
In states such as Ohio and Michigan, a slowing economy and rise in unemployment are the culprits, not poor lending guidelines (Mr Romney, congratulations on your win).
Interesting statistic in the above story. Massachusetts is not in the top-10 or bottom-10 of states with the most adjustable-rate mortgage loans (I can’t seem to find out where we are …).
Which is good, at least for our local economy, right? Although not responsible for the majority of defaults, the less ARMs resetting, the better.
Source: Don’t Blame it on the ARMs – By Prashant Gopal, Business Week, by way of Realtor.org