In response, the surviving lenders severely curtailed credit availability. Homeownership Present The lingering effects of this recent history continue to be felt in today’s housing market. We are now seeing high delinquency rates in every category of mortgages.
While defaults in 2007 and 2008 were elevated by poor underwriting practices and the use of inappropriate mortgage products, the current deterioration reflects to a greater degree job losses and lower house prices. In addition, reduced home equity has impaired borrowers’ abilities to refinance their mortgages or sell their homes to cope with income loss, unexpected expenses, or adverse life events.