Mortgage Crisis Spreads Beyond Subprime Loans

New York Times (02/12/08) P. A1; Bajaj, Vikas; Story, Louise
The Mortgage Bankers Association reports a surge in the delinquency and foreclosure rate for prime mortgages to almost 4 percent at the end of September, marking a nine-year high. While much less than the 24-percent subprime delinquency rate, experts remain concerned about the fact that creditworthy borrowers are finding it difficult to make their monthly payments—a problem that even involves homeowners with six-figure incomes who used adjustable-rate mortgages to buy homes in California and other high-cost markets and now are unable to sell their properties to avoid foreclosure. Experts note the rebates provided by the federal economic stimulus package probably will not cover the past-due amounts for most homeowners. In an effort to assist struggling borrowers, Bank of America, Citigroup, Countrywide Financial, JPMorgan Chase, Washington Mutual and Wells Fargo plan to stop foreclosure proceedings for delinquent prime and subprime borrowers to give them a month to seek modifications.