Consumer spending has been one of the main drivers of economic growth, but it has shown signs of abating in recent months as homeowners feel the pinch of rising mortgage rates and higher living costs.
Foreclosures in Wisconsin up 25% this year ...
Robert Jansen, president of ForeclosuresWI.com, said a mix of rising interest rates are being compounded by adjustable-rate mortgages, creating large increases to many homeowners' monthly mortgage payments.
Lenders are getting picky ...
Behind the change is a rapid shift in mentality by investors, many of whom were burned by bankrupt mortgage lenders and rising foreclosure rates. Their angst has rippled through to the securitization market – which packages mortgages into large portfolios that are bought and sold by investors. This provides liquidity for the lenders. Starting a week ago, however, the buyers of these portfolios stopped buying as they questioned the safety of their investments. "It just disappeared," says Mr. Duncan. "There is no question we have a serious liquidity problem in the market today."
Word to the wise: don't but a house on Nantucket.
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