The mortgage mess is about to get messier, said Joe Bel Bruno in the Associated Press. In the next several months, about 2 million adjustable loans will reset to a higher rate. How much higher? Domenico Colombo, a homeowner in Fort Lauderdale, recently realized that the monthly payment on his adjustable-rate mortgage was about to balloon by 30 percent—an extra $1,500 a month. Although Colombo managed to refinance and thinks he’ll be all right, “the future is less certain for the rest of us.” The mortgage crisis may force some people out of their homes, depressing housing values even further, and “might also spiral throughout the economy.”
If you haven’t yet felt the credit crunch, just wait, said Kathy Chu in USA Today. “More of us will find it harder—and costlier—to borrow money.” Many will also see the value of retirement savings sink as the fallout from the housing bust spins its way through the rest of the economy. With housing gains and easy credit no longer subsidizing their income, consumers will have no choice but to tighten purse strings. “Even those with pristine credit aren’t likely to escape the spreading credit crisis.” Credit card lenders, for instance, are lowering limits across the board. Meanwhile, credit bureau TransUnion’s TrueCredit.com division “has begun recommending that consumers maintain a credit score of at least 680 to qualify for prime rates.” Previously, the required score was 650.
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