Suzanne Ziegler at the Strib unpacks the data in a fresh study from the Minnesota Home Ownership Center that has picked up a shift in those seeking foreclosure prevention counseling. From the article:
60 percent of those seeking help at the center had prime mortgages, while only 37 percent had subprime. In 2007, 57 percent had prime, 43 percent subprime. Of those with prime mortgages last year, 27 percent were adjustable-rate mortgages,
The report also gives some insight into one of my pet issues, and further evidence against the popular-but-wrong notion that loan type (Subprime, Adjustable rate, option ARM, Alt-A, Interest Only, etc.) causes most foreclosures. From the study (also see graphic above):
Thirty-five percent cited reduction of income and 15 percent cited loss of income. After that, reasons were poor budget management, medical issues, increase in loan payment, divorce or separation and others.
Got that? Lots of other great data in the study itself – should be required reading for real estate/mortgage people and interested citizens. Download the Study (PDF!) here.