Mortgage crisis in USA spreads by Romana Schlesingerova

The mortgage trap in USA didn`t catch only banks, which lost several billions of dollars. The sudden overflow of the loan market, took down the majority of poor customers as well. What is more surprising is, that the American "trap" moped up some relatively solvent Americans, belonging to the middle class, according to Wall Street Journal. This daily newspaper thinks that banks will loose even more in next years, because of the people not being able to pay their mortgages. We are talking about hundreds thousands of loans. Bush`s administration together with the biggest financial institutions and capital corporations, came with the idea of freezing the interest rates for some types of loans. This, can probably, avoid the deeper sink of the mortgage market. One of the examples, showing the real impact of the crisis, is a case presented by the Californian lawyer Peter Fredman. His client`s monthly retirement income is 2500 dollars. The married couple`s mortgage payment is now over their budget. They have to pay 3400 dollars a month. Their last payment was in January. Broker`s advise about the "little" more expensive loan without the documentation is now the reason for waking up in the middle of the night. They expected the payment of 1500 dollars a month. Surprisingly big number of risky mortgage loans inside of the middle and upper class shows, where the crisis really stands. The responsibility for the problem is on bank`s and their broker`s shoulders. Many citizens with good credits say, that the brokers pushed them to more expensive loans, which where easier to arrange. People came to great sums without showing the proof of their incomes.

related story: http://news.yahoo.com/s/ap/20071203/ap_on_bi_ge/mortgage_crisis;_ylt=AuNtAbCkUWqmVo5l5f1rOPWs0NUE

by Romana Schlesingerova for PocketNews (http://pocketnews.tv)

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Edited by Zuzana Tylkova