Thursday, September 29, 2005

High-cost housing markets score low on foreclosures

(From the Chicago Tribune)

You've probably seen the dire news reports:

American homeowners are becoming debt junkies, piling up record mortgage amounts, credit card bills, home equity credit lines. They are putting down less when they buy and borrowing a lot more.

Families in high-cost real estate markets are stretching their household budgets to the breaking point in order to buy even a modest home. Some families are devoting 40 percent to 50 percent of their monthly income just to hang on to their high-priced houses.

With interest rates certain to rise from 40-year lows, debt pressures on borrowers can only get worse, pushing some families to the brink.

Given all that gloom and doom, you'd think that homeowners' growing financial challenges would be visible in their payment performances on their mortgages. With such leadweight household debts, you'd think growing numbers of borrowers might be falling behind, paying their mortgage lenders late, and maybe even sliding toward foreclosure.

But the reverse is true...