Times have never have never been worse. Your confidence is failing. You fear calamity. How will your children eat? We are your media. We are here to protect you. Vote Democrat. |
Posted on 05/06/2003 5:48:26 AM PDT by Brian S
By Aleksandrs Rozens
NEW YORK (Reuters) - Credit cards with double-digit interest rates have eaten away at Linda Schrock's savings, making it tough for the Appomattox, Virginia, lab technician and her husband to make timely mortgage payments.
These hefty costs come at a time when the Schrocks -- and many other Americans -- are faced with rising costs for the unavoidables that come with home ownership, like real estate taxes, insurance and energy.
"The costs go up. There is never enough money. You have these insane credit cards you can't get paid off," she said. "You do without stuff if it comes to paying for your home. You're going to make a house payment."
While many home owners think housing affordability is all about the impact of interest rates on the monthly mortgage payment, mortgage rates are not the only consideration.
"Recent indications that insurance rates are going up, combined with the likelihood the fiscal difficulties of state and local governments will lead them to raise property taxes, will also affect the ability of borrowers to acquire mortgages or meet their current mortgage obligations," said Douglas Duncan, chief economist at the Mortgage Bankers Association of America, an industry trade group.
"For those stretched to make mortgage payments, we could see a rise in delinquencies," he said. Duncan predicts "it will take a while to feed through, maybe later in the year, or early next year."
State and local governments, hit hard by the economic slump, are boosting taxes to close huge budget gaps.
CARD AND AUTO DEBT -- TEA LEAVES?
Signs of trouble for home owners may already be brewing.
Usually, late payments on mortgage debt are preceded by late payments on credit cards and auto loans. After all, few people want to lose the roof over their head.
"It is cards first, cars second and then the home," said Chris Viale, of Cambridge Credit, a firm that helps consumers work out their debt problems. But, he noted, "sometimes, they'll let the home go before they adjust what they pay for cable TV."
Viale has recommended his clients take any tax refunds they get and pay off debt, beginning with credit cards.
The rise in late credit card payments has already been spotted.
In March, the American Bankers Association said fourth-quarter 2002 credit card delinquencies shot to highs not seen since the group began tracking payment behavior 13 years ago.
Much of that rise in delinquencies was tied to a sluggish employment market, which has worsened since March. Last week, the U.S. government said the nation's jobless rate rose to 6 percent in April.
At the same time, Moody's credit rating agency reported that auto loan delinquencies were on the rise and the MBA reported homes in foreclosure in the final quarter of 2002 zipped to record highs.
These signs all point to tough going for home owners.
"With the increase in real estate taxes, they'll be caught by surprise," said Viale.
We'll be building a new house this summer. I'm almost afraid we'll be taxed-and-insured out of it.
Yeah. Sure. Blame the interest rates for eating into her savings. It couldn't possibly be the actual spending that this woman is doing, right??
Yep - it could...
Credit-carb creditors are taking on the appearance of loan sharks, trying to seduce people who can't afford them into debt. Now they're trying to change bankruptcy laws to help them create more deadbeats.
I know, "personal responsibility"--but these companies hawk cards to freshmen in college!! Kids with no income!!
Many think they can do the same thing by taking out all equity in there homestead, signing and returning $10,000 credit card offers and taking delivery of those $40,000 automobile.
There are a whole bunch of folks that have never seen a 'real recession', i.e. 1979 and don't realize that if you can't make the notes, you lose what you have.
I'm afraid that the real estate bubble is about to be pricked, when foreclosures flood the market.
Times have never have never been worse. Your confidence is failing. You fear calamity. How will your children eat? We are your media. We are here to protect you. Vote Democrat. |
What a crook! If a homeowner hasn't refinanced and significantly lowered their "homeowner burdens', they are dumber than a bowling ball.
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Your burdens are getting heavier. They are sooooo heavy. Never before have your burdens weighed you down so.