Home buyers couldn't pay the monthly payment due to the reset interest rate. So they some of them had to put homes in foreclosure and sport "For Sale" sings.
Soaring mortgage default rates this year already have shaken major financial institutions and the fallout from more of them. Some experts say, it could spread from those already battered banks into the general enonomy. For instance, its effect on consumption, its effect on future lending attitudes, could bring us close to the zeor line in terms of economic growth.
The already severe housing slump would be exacerbated by even more empty homes on the market. The downturn could cause more jobs lost and affect investment firms as well.
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