Mortgage delinquencies continue to increase, signaling a steady rise in Chapter 7 bankruptcy and Chapter 13 Debtor’s Court filings, throughout the rest of 2009 and into 2010. According to Margaret Chadbourn’s article at Bloomberg, delinquency rates on the LEAST-risky mortgages have more than doubled in Q1 2009, as compared to Q1 2008. Government attempts to save the housing market do not appear to be working (I’m not surprised).
What does this mean? It means the sub-prime mortgages are not the only problem. Many homeowners who have prime loans are at risk too. So what happened? Simple: “we” spent too much money…everybody did; individuals, corporations and governments have spent too much money. Individuals are spending less. Businesses are spending less. Government is spending…MORE!?!?
Deleveraging (reducing debt) hurts; it’s messy; it’s not fun; nobody “wants” to do it, but it must be done. Hello, Government, that means you too.
Unfortunately, Bankruptcy or Debtor’s Court will be the only answer for some homeowners, even those with prime mortgages.
If you are currently experiencing financial problems, have questions about your mortgage or bankruptcy, please feel free to email me with any questions.