Prime Mortgage Domino To Fall Next

Move over sub-prime meltdown, the prime mortgages are next to head into trouble. As predicted, due to the slowing economy and massive layoffs, more and more homeowners with good credit histories are falling behind on their mortgage payments. Here’s a New York Times article on the nationwide spread of the 3rd mortgage domino to fall.

From November to February, $224 billion worth of prime mortgages were delinquent at least 90 days, and were in foreclosure or had deteriorated to the point that the lender took possession of the home. That was an increase of more than 473,000, exceeding 1.5 million, according to a New York Times analysis of data provided by First American CoreLogic, a real estate research group.

Foreclosure rates among prime borrowers have been growing fastest in states with particularly high unemployment. In California, the unemployment rate doubled to 11.2 percent for the year that ended in March, while the foreclosure rate for prime mortgages nearly tripled, reaching 1.81 percent.