ONE IN 18 HOMEOWNERS IN ARIZONA is estimated to be in foreclosure by the end of 2010, as a result of a subprime-related loan. Years of easily accessible credit and relatively low home prices that facilitated homeownership in the state have ended, leaving in their wake stricter lending terms and stagnating home appreciation. Arizona is one of about a dozen states with a higher estimated foreclosure rate than the U.S.average of one in 33 homeowners. It must cope with a subprime foreclosure crisis that threatens to have ripple effects on nearly two thirds of neighboring Arizona homeowners’ property values.
ASSESSMENT: Arizona was one of the first states to establish a consumer hotline, and more recently passed a mortgage fraud law, formed a foreclosure task force and negotiated loan modification terms with lenders on behalf of homeowners. However, the state lacks a predatory mortgage lending law to prevent future problems. In December 2007, the governor met with the state’s major lenders to discuss voluntary loan modifications and to encourage outreach to distressed borrowers before their loans reset, but no firm agreement on loan modifications was achieved. *As of December 2008
THE FACTS: The ripple effects of the foreclosure crisis THE RESPONSE: Preserving a piece of the dream
THE FORECLOSURE NUMBERS:
The projections above are from the Center for Responsible Lending’s subprime spillover research, updated in February 2008. These estimates focus on foreclosures resulting from subprime loans made to owner-occupants in 2005 and 2006. For a full description of the methodology, please see Defaulting on the Dream: States Respond to America’s Foreclosure Crisis, released in April 2008 and available at www.pewcenteronthestates.org.
"Direct mail offers are flowing for business credit cards, many with attractive promotional interest rates and balance transfer deals...while there are many reasons to open an account, there can be substantial risks involved."
More infoEleni Constantine, director of the Pew Health Group’s financial security portfolio, issued the following statement in support of legislation creating an “automatic IRA,” S. 3760, introduced by Sen. Jeff Bingaman (D-NM) and H.R. 6099, introduced by Rep. Richard Neal (D-MA).
More info“The student loan proposal announced by the President today could not come at a better time, as the weak economy and high unemployment are making it harder than ever for people to make monthly payments on their student loans."
More infoYesterday the U.S. Department of Education released a preview of college “cohort default rates” for federal student loans using a more robust methodology that will take effect in 2011.
More infoThe Project on Student Debt's fourth annual report on the student loan debt of new college graduates. The analysis of the most recent available data found that student debt continued to rise even as it got harder for recent graduates to find jobs, and that debt levels vary considerably from state to state and college to college.
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