Unemployment, "Prime" Loans Going Bad... Welcome to Flavor Country
Those employment numbers don't look so great. Now, put 'em together with the foreclosure numbers, and you've got yourself some bad pumpkin.
As Calculated Risk pointed out today (and as many others have been saying for a while) this is not going to be a "subprime" problem. This is rapidly showing itself to have been simply a bad loan/greed problem. People borrowed more than they could afford in order to get into skyrocketing houses because they didn't care what the payments would look like later, and neither did the lenders. They all saw dollar signs on the horizon.
From the release:
“The other factor that continues to drive foreclosure rates is loan type,” continued Brinkmann. “Subprime ARM loans accounted for 36 percent of all foreclosures started and prime ARMs, which include option ARMs, represented 23 percent. However, the increase in prime ARMs foreclosure starts was greater than the combined increase in fixed-rate and ARM subprime loans. Thus the foreclosure start numbers will likely be increasingly dominated increasingly by prime ARM loans.