More than 4 million American homeowners with a mortgage, a record 9 percent, were either behind on their payments or in foreclosure at the end of June, as damage from the housing crisis worsened, the Mortgage Bankers Association said Friday.
But the source of trouble in the mortgage market has shifted from subprime loans made to borrowers with poor credit to homeowners who had solid credit but took out exotic loans with ballooning monthly payments.
“The problem that policymakers and Wall Street once assured us was ‘contained’ to subprime mortgages has proven to be anything but,” Mike Larson, a real estate analyst with Weiss Research, said in a research note.
The trouble is concentrated in a handful of states, the worst being California and Florida, which had some of the riskiest lending practices and rampant speculation.
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