Noose’s Tightening… Can You Escape?

Times have never been so bad for homeowners both existing and aspiring. Some of them get trapped into taking adjustable rate mortgages and are then stuck with higher payments. So, they try to wriggle out of the situation by tapping into their home’s equity. And what do you know? Home equity loan rates have surged from 4.5 percent to 8.25 percent and home values have stopped rising and even fallen in some markets. This means taking out a loan against your home’s equity is no longer a viable option.

And then there are those who have already taken out loans against their home’s equity. They are now faced with the too real proposition of losing their homes. Most of these homeowners also have huge credit card debts, which makes their situation even more precarious. Already nationwide mortgage delinquencies (mortgages where one or more payments have been missed) are up slightly from a year ago. However, the worst may be yet to come.