As job losses rise, growing numbers of American homeowners with once solid credit are falling behind on their mortgages, amplifying a wave of foreclosures.<\/p>\n
In the latest phase of the nation\u2019s real estate disaster, the locus of trouble has shifted from subprime loans \u201d\u201d those extended to home buyers with troubled credit \u201d\u201d to the far more numerous prime loans issued to those with decent financial histories.<\/p>\n
With many economists anticipating that the unemployment rate will rise into the double digits from its current 8.9 percent, foreclosures are expected to accelerate. That could exacerbate bank losses, adding pressure to the financial system and the broader economy.<\/p>\n
\u201cWe\u2019re about to have a big problem,\u201d\u009d said Morris A. Davis, a real estate expert at the University of Wisconsin. \u201cForeclosures were bad last year? It\u2019s going to get worse.\u201d\u009d<\/p>\n