Is there any doubt to anyone that if people cannot keep up with their mortgage, it would spill over into other areas? If people are delinquent on their mortgages, you better believe that it will spill over into credit card payments and even auto payments. People do not become delinquent to become delinquent. That can mean several things (1) employment could have changed; (2) a husband and wife could have divorced and the person who keeps the house is not able to afford it; or (3) over the last few months they have really been trying to keep everything together but with the adjustable rate - adjusting they are not able to keep up.

The inability to keep up with the adjustable rate has spilled over into their car payment. The first time they are not able to make their car payment, they do not feel as bad because they already believe they will be able to catch up in the next couple of weeks. So the first time, they are actually accepting this happened. But the third time it happens, they are in a panic situation because they realize this is not the only bill they can no longer afford. The mortgage has turned into such a nightmare, they are desperate for resolution.

When you become desperate for resolution you do not see things as clearly as if you were level-headed and calm. You open yourself up to be taken advantage of and making unwise decisions. When I saw this story last week about the mortgage market having an actual melt down, I could not wait to see what was happening. Apparently as we all knew it, foreclosures is not over. Federal Reserve Chairman Ben Bernanke continues to pledge to do all that is possible to help struggling homeowners. Many people already think we are on the verge of a recession.

I have to tell you it seems that so many things are upside down, will homeowners truly be able to be helped. I continue to look in my neighborhood and more houses are having for sale signs in the neighborhood. Even those homes that I thought everything was okay, leads me to wonder why those homes are now for sale. It is because they are trying to get out before their homes no longer have any value or is it a job transfer? What would you think.

Bernanke shared which we already knew, "abusive, unfair or deceptive lending practices led some borrowers into mortgages that they would not have chosen knowingly." What is the solution to this. Many are still feeling deeply the consequences of these lending practices. One of the bad parts is that these consequences are far reaching and could reach to the generations versus just the parent, aunt or uncle that is currently dealing with this.

When I said domino effect, sure it affects other items that must be paid on, but it can also affect a youth when making choices based on what they saw growing up.

Dr. Taffy Wagner

Read more ... http://www.fhamortgagecenter.com/fha-blog/mortgage-market-has-domino-effect/.