An article just released titled ‘12 pct. are behind on mortgage or in foreclosure’ reports that “a record 12% of (U.S.) homeowners with a mortgage are behind on their payments or in foreclosure as the housing crisis spreads to borrowers with good credit”, and that according to the Mortgage Bankers Association “the wave of foreclosures isn’t expected to crest until the end of next year”.  The article also says the foreclosure rate on prime fixed-rate loans doubled in the last year, and now represents the largest share of new foreclosures, and that almost 6% of fixed-rate mortgages to borrowers with good credit were in the foreclosure process while almost half of all adjustable-rate loans made to borrowers with shaky credit were past due or in foreclosure.

I consider these statistics shocking.  How people could be so foolish as to borrow beyond their means without considering the consequences is to me even worse than the borrowers lending them the money.  Ultimately I believe everyone is responsible for their own actions and suffers the consequences (ggod or bad) of those actions.  It is thought by some (in absence of reliable studies) that over 25% of all U.S. consumer spending in the 2003 – 2006 period came from homeowners borrowing against their private residences.  If there is any truth to this, assuming I am correct in my belief that increased spending by U.S. consumers is the key to getting out of recession, I can’t see how in light of the foregoing foreclosure and mortgage delinquency statistics the U.S. will get out of recession in the foreseeable future.

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