US markets in trouble

Wells Fargo offers insight into 200 troubled counties and cities in US. Bernanke says foreclosures are hurting the country's economy.

Wells Fargo and Co, which is the second largest US mortgage lender, issued a report on 25 February outlining 200 key counties and cities that are in the highest state of alert in their housing markets.

It pointed out areas that are "soft," distressed," or "severely distressed." On 29 February, Wells Fargo will be tightening its belt in terms of lending, and in doing so will be changing its loan principles. In some of these tightened markets, the company will no longer accept mortgages over 75 per cent of the property's value.
Severely distressed markets included San Diego county, Los Angeles county and 18 others. Other markets that were labelled as at risk including those found in Florida, with 33 counties, Michigan and Virginia, which had 15 distressed counties, and Ohio and Maryland with 33 distressed counties.

Markets that were considered at risk, though not as severely, included Arizona, Washington DC, New Jersey, Connecticut, Colorado, and several others.

Bernanke, Fed Chairman in the US, said that the economic outlook of the country is hinged partly on the foreclosures within the country. All eyes on him are pointing to the risk of inflation increases. While somewhat expected due to the high cuts in interest rates, it is also something American consumers may find hard to swallow. Many economists believe that the Fed will trim rates again at the next meeting on March 18th.

BOOKMARK THIS PAGE (What is this?)