Think it has something to do with all of the jobs going over seas and jobs being created here are low wage jobs. Not telling the truth about unemployment. We don't count the ones who have ran out of benefits.
2007-08-21 01:57:00 · 3 answers · asked by margie s 4 in Social Science ➔ Economics
But what about the companies going out of business. They also went out of business in record numbers. Things are not adding up.
2007-08-21 12:56:19 · update #1
No the US Department of Labor, unlike European countries, doesn't count those who no longer collect unemployment checks as unemployed. As far as foreclosures, banks gave mortgage loans to those who had shaky credit history. That's why mortgage companies are in trouble today, they took risky chances and it backfired.
2007-08-21 02:09:19 · answer #1 · answered by mac 7 · 0⤊ 1⤋
The number of foreclosures has to do with the rise in interest rates over the past several months. Homeowners were able to buy their homes with bad credit and no downpayment. These mortgages were usually adjustable rate mortgages, rather than conventional fixed rate mortgages. Then, the Fed started raising interest rates to fight inflation, and the interest rates on the adjustable rate mortgages shot up. When families could not make those higher mortgage payments, they defaulted.
This is likely, however, to increase unemployment over the next few months. Banks are laying off people, mortgage brokers and real estate agents are losing their jobs, and so on. This will then lead to more foreclosures, as family incomes drop.
2007-08-21 02:17:40 · answer #2 · answered by Allan 6 · 0⤊ 0⤋
Mortgage lenders gave home loans to people with poor credit history ("subprime loans"). These people are more likely to default on loans due to delinquent payment histories, not making steady income, etc . The loans they were able to get were adjustable rate mortgages.
This means that, at the time they initially got the loan, they had manageable monthly payments. Then, as rates increased, so did monthly payments. So the result was a massive amount of people who shouldn't have been given loans (according to banking standards) with sky rocketing monthly payments.
When you can't pay your mortgage your house is foreclosed upon.
Employment has an affect on people's ability to pay their bills but if you don't have a job you shouldn't be buying a house.
2007-08-21 03:34:42 · answer #3 · answered by G_Elisabeth 5 · 0⤊ 0⤋