Star Tribune Sun, 01 Jun 2008 11:55:23 GMT
Home mortgage 'reset' shock to hit suburbs
The foreclosure crisis in Minnesota continues and is now poised to spread from cities to suburbs. In large swaths of the Twin Cities and across the state, 40 percent of more than 50,000 subprime loans will jump to higher payments this year. Another 22 percent will reset after this year. In Twin Cities suburbs, where home construction once boomed, hundreds of square miles are dotted with the homes of tens of thousands of subprime borrowers who will skid into higher monthly payments in 2008. Seventy-seven percent of such loans were taken out after 2004. Older, urban neighborhoods have already seen a cascade of foreclosures in recent months. Declining interest rates could provide a respite for some, but the breather on higher payments may be short-lived. "Foreclosure rates, certainly for 2008, will remain high and, in some places, at historical levels," said Michael Grover, an author of a new study published by the Federal Reserve Bank of Minneapolis. "We certainly are not out of the storm."
[[keywords: Housing;Metro;]]
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