FOX19.com and FOX19 News, weather, traffic, and sports for Cincinnati and Northern Kentucky | Pink slips send foreclosure crisis into new stage
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Associated Press - May 31, 2009 10:45 AM ET
CLEVELAND (AP) - Increasing joblessness has fueled a new stage in the foreclosure crisis in northeast Ohio and around the country.
Unemployment has caused more and more homeowners to default on traditional, fixed-rate loans. Before, the foreclosure crisis was mainly caused by plunging real estate values and subprime mortgages whose lending terms grew increasingly unfavorable to borrowers.
The Mortgage Bankers Association says that in the first quarter of 2008, prime fixed-rate loans made up 19% of foreclosures. In the first quarter of 2009, fixed rate loans jumped to 29% of all foreclosures.
Housing advocates in northeast Ohio say homeowners who have never had problems making payments are now having trouble because of layoffs.
Information from: The Plain Dealer, http://www.cleveland.com
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