Quote:
Originally Posted by davestlouis
I do debt collection work and was on the phone with a credit union today. The collector's comment was that she has never seen so many people go from A-Credit to foreclosure/bankruptcy in 90 days as she has in the past 12 months. It's like these people just dry up and blow away. I have seen it myself: I go to the delinquent debtor's home and knock on the door, to try to get them to talk. 10 years ago, I spent a lot of time in the city, in low income areas. Now I rarely even venture into the city, I spend a lot of time in upscale subdivisions. I work for multiple lenders, and there are times that I knock on a guy's door, about his mortgage and his car, and maybe even his piano loan.
Scary stuff. All I can offer is my personal experience, but what I see in STL points to a not-so-pretty trend.
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There is an interesting observation throughout the mortgage pops.
Many, esp. upper middle class, but also first time buyers with clean credit, took part in the frenzy at the height of the real estate bubble syndrom.
Not know much of anything grabbing the low to zero down payment option on expensive homes, disregarding refi terms and mortgage rate increase.
Now, it has become a popular move for those, to take equity on their expensive property, put it down on something more affordable and once escrow is closed, they dump the previous high price property, which was destined to be unpayable sooner or later and leave it to foreclosures.
Doing that, they wreck their credit, but manage to live on in a home they can actually pay for and worry about restoring their credit later.