7 out of 12 Mortgage Delinquencies Came from California Homeowners
8:04 am in Banking in California Southbay, Cost of Living, Current Events, Living in California Southbay, Real Estate by Jane in Redondo
California real estate prices have been heating up and experts had predicted some instability with homeowners who have leveraged creative financing to stretch their already thin budget. Today’s Wall Street Journal article, “” by Ruth Simon revealed how lenders are happy to lend money even when mortgage delinquencies are on the rise.
Since lenders make transactional revenue, they are only too happy to give a loan. Many homeowners had made bad decisions with their borrowing, which got them into today’s pickle, and they may exacerbate their financial situation by borrowing more to cover their increasing debts from rising mortgage rates. The journal reported that “The rise in problem loans appears to be most closely tied to looser lending standards, homeowners pulling out their equity and a cooling housing market.” What is unusual is that these delinquencies seem unrelated to changing job market, which appears to be stronger than ever before.
Graphic Source: Wall Street Journal
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