Foreclosures increase on high-risk mortgages

The Boston Globe reports:

-More Rhode Islanders losing their homes as the number of foreclosures on high-risk mortgages increases.

Mortgage companies give people with less-than-perfect credit subprime loans that carry higher-than-average interest rates.

Rhode Island has the largest portion of subprime loans in the nation. More than one in four mortgages issued to Rhode Islanders in 2003 carried terms that are considered subprime.

Now, more of those mortgages are ending in foreclosure, according to LoanPerformance, a San Francisco firm that analyzes mortgage data. The foreclosure rate on subprime loans jumped 0.41 percent in the third-quarter last year -- the largest increase in the nation.

Remember a homeowner without equity is a renter with debt.We bring this up because the non-traditional mortgages are given to those who usually don't qualify for the traditional mortgage.If mortgage rates get back to 7.25% there could be some real problems in the real estate market.