U.S. Mortgage Delinquency And Foreclosure Rates Are On The Rise

Mortgage delinquency and foreclosure rates are on the rise, and the impact could be greatest on low-income families that took out higher-interest loans for risky borrowers.

Expanding opportunities for more people to buy a home is a good thing. But Americans to become overextended and their dream end in foreclosure.

There have started to be "early signs of credit distress" in financial institutions' holdings of so-called "subprime" mortgages, especially in California.

When interest rates rise, as happened last spring, it can raise monthly payments for people with adjustable-rate mortgages, potentially creating a strain if they stretched to buy a home and don't have a financial cushion in their savings.

There is worse to come. ... The bottom is probably still many months ahead. The rise in delinquencies and foreclosures in subprime mortgages particularly affects low-income families.

In September that mortgage foreclosures climbed in the 2nd quarter as higher interest rates and energy prices made monthly payments harder for some homeowners.