California’s Next Mortgage Crisis
With California being particularly hard hit by falling home prices (a 26% drop in February compared to the previous year), Slate suggests the next wave will be prime borrowers simply walking away from mortgages that no longer make financial sense.
Lenders had no reservations about selling borrowers loans with rising payments that would be poisonous in a rising market. Now it seems borrowers have no reservations about leaving those lenders with the risks they begged to take.
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