There once was a time in Sacramento when well-educated people had two good jobs per household, a safe fixed-rate mortgage, and easy assurances that the mortgage crisis was someone else's problem. Not so much now in 2009.
Suddenly, these are the new people in trouble as 11.6 percent unemployment and 14 percent wage cuts across state government take a toll. Their prime fixed-rate 30-year loans – the benchmark of responsibility and reliability, the sign of a college degree with the same payment every month year in and out – are buckling under pressures of a nasty economy.
Sacramento-area lenders, loan counselors and credit attorneys say they've seen it for months as thousands get pink slips, which ripples outward into lost earnings for area business owners. Thursday, the Mortgage Bankers Association spotlighted the trend nationally, saying "prime fixed-rate loans account now for one in three foreclosure starts."
The old subprime adjustable-rate loan problem that started the crisis in 2007 continued to wane in 43 states in April, May and June, the MBA said. But the new prime fixed-rate problem rose in 41 states, including California.
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