We are now dealing with the aftermath of tons of mortgage loans that should never have been given that are now going bad. These loans not being paid piled on top of each other until the economy collapsed. Now it is not just those with bad mortgages foreclosing. Even those who took out reasonable, responsible loans are in big trouble because the down economy has caused them to be let go at their job, or in some cases, jobs.
In 2006 the percent of delinquencies caused by job loss was 36.3%. In June of this year it was 45.5%. Falling home prices are certainly still a factor but job loss is on the rise and has not yet stopped. Nearly a million Americans lost their jobs this year. It is a vicious cycle. The housing crisis is driving unemployment, which in turn has exacerbated the housing crisis.
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