A New Foreclosure Wave Hits The Jobless

(CBS)  There's a new wave of foreclosure sweeping across the country, and the people who are getting swept up are not greedy investors, or people who got in over their heads with bad loans, reports CBS News correspondent Ben Tracy. Rather, the crisis is hitting home for those who never expected to be in trouble until the slumping economy put them out of work.

As a code enforcer, Judy Jones' job was to make sure foreclosed homes, often trashed by owners on their way out the door, got cleaned up. With a government job, good credit, and a 30 year fixed rate loan on her southern California house, Judy never planned on taking her work home.

But last month she was laid off, joining a new wave of homeowners who paid their mortgages on time but now can't because they're out of work.

"The foreclosure crisis began mostly as a problem for lower income households," says Mark Zandi of Moody's. "It is now a problem for all households: low, middle income and even higher income households."

More than 2 million prime mortgages, traditional loans for people with good credit, are now delinquent. That's 624,000 more than this time last year, according to the mortgage bankers foundation, Tracy reports.

"We didn't necessarily expect the distress levels that we are seeing at this point," says economist Mark Fleming.

It used to be if you couldn't afford your mortgage you could always try to refinance or sell your home and pay off your loan. But these days, for a lot of people, those options no longer exist.

That's because 12 million households now owe more than their homes are worth, according to Moody's.

Homeowners with risky adjustable rate mortgages are getting help from banks, but there are no programs to aid those who already have good loans but no jobs.

"I wake up in the middle of the night thinking about it," says Terri Osier, a struggling homeowner.

Meanwhile, Judy Jones is hoping her bank will lower her payments until she finds work.

"If they don't, I'm not going to drain my savings, I am not going to drain my 401k, I am going to walk away," Jones says.

[pforeclosure]

The only good thing that you might be able to say about all this is that banks are more inclined to go forward with a loan modification for those homeowners who have suffered a job loss. A bank''s loan modification can provide a lower monthly payment by reducing the rate, term or in some cases the principal. A do-it-yourself loan modification guide is available for those interested at preventingforeclosure.org, a non-profit resource.

[wardoglrs]

The Federal Reserve Robbing America since 1913:

Don''''t pay taxes and stop using credit card''''s. you can defeat these Neo Cons America, with the same fire they use "MONEY"

The IRS is a guard dog created by the Jewish Zionist like everything else they control, if you don''''t fight what you see and know to be true and sound then you have lost.

Destroy them before they destroy you & your family''''s security. There not worth it...
Google "End the fed"

Return to your Constitution it protects you from them..Enforce your fraud law''''s on all leadership
Jail them before they jail you.

Or better yet just get a rope

[ffoulkes-2009]

Now THESE are the foreclosures you feel bad about. When people are unable to work or find jobs and lose their homes.

I don''t feel any pity for people who bought above their income in hopes of flipping the house two years down the line. These are the ones who brought economic disaster among us.

[walt1944-2009]

I remember several months ago when neocon Fascist Nazi Republicans were "crowing" about how people should be more responsible in what they buy, that the mortgage crises was caused by "bad people in bad loans" and that IT COULD NEVER HAPPEN TO THEM!!!!

Apparently they thought that a bad economy and job loss would NEVER, EVER happen TO THEM! After all, the Great Emperor Bush would NEVER have stupidly-loyal neocons lose THEIR jobs and suddenly find the uncharted frontier of UNEMPLOYMENT! That was only meant for evil, cowardly Democrats who dared to criticize the fantasy economic policies of the Great Emperor Bush II.

Now these same neocons who said that "bad people should never be given loans" are out of work and having trouble hanging on to what THEY HAVE!!!

Yes, there is a LOT of truth in that old saying "What goes around, COMES AROUND"!!!

SIG HEIL, I DON''T HOLD A GRUDGE, MUCH!!!!, BUSH!!!

[Meg003]

"Instead of directing insults at those less fortunate we need to be trying to figure out some way to repair the economy and generate good jobs for Americans."

Posted by Element51

You make some excellent points. If enough people have you outlook, Americans will find ways to come out of this economic downturn. Maybe we will revive the values you express of compassion and selflessness.

[Meg003]

For people looking for ways to help those hit by the economic fiasco, you might check with your local school. Sometimes a family needs medicine, or help with a power bill, or just a little money to repair the family car. You can do this anonymously, if you prefer.

[Meg003]

The point is there but for the grace of God go you and you and you -- no matter how much you have prepared.

Posted by letsgetright

Thank you , letsgetright, for expressing so well what I attempted to say in my "rambling incoherent string of sentences."

[letsgetright]

Interesting comments made by people who hear a few soundbites. The woman this piece is 61 years old, raised four children on her own. Worked tirelessly since she was 19. She did not take welfare when she could.She lived within her means even when it meant beans and wienies many nights. She has been a homeowner for more than 10 years and never had a late payment.Had a modest savings and a 401 K (worth little since the financial meltdown). She bought a home she could afford, making a 30% down payment for a 30-year fixed with an envious interest rate of 5.875 because of her excellent credit. She is NOT asking for a bailout and doesn''t expect one. She is only asking her lender for respite. The very lender who played a major role in creating the economic meltdown should be able to at least do that. She has NOT lived off a government job for 25 years as one writer wrote. After 30 years in the private sector, she went to work for a city 9 years ago. Her unemployment status is directly related to the economic meltdown created by bad loans. Those loans equal foreclosures, foreclosures equal loss in property taxes, loss of property taxes equal loss of government services, loss of government services equal loss of government jobs. And for the person thinking this woman is not trying to get a job, you need to walk in her shoes . You''d have a few blisters. The point is there but for the grace of God go you and you and you -- no matter how much you have prepared.

[Meg003]

Well, that was certainly a rambling incoherent string of sentences. You could have just said "It''''s not nice to call someone an imbecile".



Posted by azure11

Yes, I can see where I could have more clearly addressed several of drivelphobe''s posts if I had quoted them before responding.

However, I believe that drivelphobe knows what he has posted, and will understand my responses.

[Meg003]

Drivelphobe

Are you having us on with these posts? I''ve rarely heard such a load of smug, condescending dogma spoken outside of spoof television.

You criticize those who have had hard luck, blaming them for not planning carefully, and now you call someone an "imbecile" who is working hard to make a living. Do you think that person got to select the type of brain with which he was born?

Your safe little bubble of a world could crash down upon you, too, unless you are one of the billionaire class.

I worked hard to establish my career and have lived frugally and planned carefully. But I don''t delude myself that hard times couldn''t come my way if several bad breaks unravel my best efforts at security. I''ve seen it happen to other careful people.