Research by Moody’s Economy.com predicts that in 2009 1.8 million borrowers will lose their home to foreclosure. This figure rises from 1.4 million homeowners in 2008. Moody is a leading independent provider of economic, financial, country, and industry research. Moody attributes the increase in foreclosure rate to the rise in unemployment. At the start of the housing crisis in 2007, the unemployment rate was about 4.6%. Last month it reached 9.4%. Many believe it reach 10% by the end of the year. This unemployment figure does not account for those self-employed individuals unable to collect unemployment, those that have a reduced wage, and those that have not given up. Other experts believe the true unemployment figure to reach closer to 15%. In San Diego unemployment is predicted to hover around 11-12%
As the start of the housing crisis, homeowners that had subprime loans were the first to lose their homes. Now unemployment is the biggest factor driving foreclosures today. “It’s a much harder nut to crack, unemployment,” said Mark Calabria, director of financial regulation studies at the Cato Institute. “It’s much easier to bash lenders than to create jobs.”
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