Defaulting mortgage holders are no longer just subprime; the latest surge in seriously delinquent mortgages comes from those considered prime. Such loans have now begun to default at a rate more than double that of just a year ago. Lenders have also seen a significant increase in defaults on HELOCs or Home Equity Lines of Credit. Add those to April’s record high defaults in credit card payments and it points to the potential for the “perfect credit storm.”
But the main story here is the troubling number of prime mortgages experiencing problems. In an interesting article in Sunday’s NY Times, economics writer, Edmund Andrews details his personal experience with the credit crisis. While we might expect Mr. Andrews to be the expert in understanding the use of credit and that he would know how to avoid the mistakes that led to the mortgage meltdown, quite to the contrary, he‘s up to his proverbial neck in debt and facing foreclosure.
Edmund Andrews’ article, “My Personal Credit Crisis” is a somber, yet interesting account of how those we look to for financial guidance could be seduced onto a path of financial ruin. Reading the article helps one sympathize with the hundreds of thousands of others who made bad choices, and while I don’t condone financial irresponsibility, I do understand how the opiate of “easy credit” has brought our country to its financial knees.
Read the full article here: My Personal Credit Crisis
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