Top of the Morning

Top of the morning

An onimous story in the L.A.Times today that might forecast future events in North Carolina unless the economy turns around or policymakers at some level step in to help.  More than 236,000 families lost their homes to foreclosure in California in 2007 and 404,000 homeowners defaulted on their loans.

It is no longer just a problem of subprime loans with variable rate mortgages and falling housing prices. The foreclosures are now also being driven by unemployment, which is now 9.3 percent in California.

North Carolina had a record 54,000 foreclosures last year, most likely the result of questionable loans, predatory lenders, and ballooning adjustable rate mortgages.  And like in California, things may get worse.

Last week’s December jobs report from the North Carolina Employment Security Commission said that more than 40,000 people lost their jobs in December, bringing our state unemployment rate to 8.7 percent, the highest level in 36 years.

One Comment

  1. Annette

    January 28, 2009 at 12:09 pm

    From the WSJ:
    Bankers’ worst nightmare is the unemployment rate climbing toward 10%, a level at which credit losses could balloon unpredictably because of high defaults among people with previously strong credit histories. Kelly King, chief executive of regional [North Carolina] bank BB&T, said unemployment of 8% to 8.5% is “kind of manageable,” but 9% to 10% would “have a dramatic impact on our scenarios.”

    This isn’t just a ‘poor people’ problem. It’s everyone’s problem and we need to work together to protect our communities.

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