Some time ago, I wrote a post about my son and his wife in Kalamazoo, Michigan, and the difficulties they were having with their rental property. Today, I read that Michigan and Ohio rank numbers one and two on Fannie Mae's list of states with the largest credit losses through September. Loans written off with no hope of recovery were $185 million for Michigan, and $101 million for Ohio. In contrast, California saw $30 million, and Florida, $21 million. Michigan also had the nation's highest unemployment rate, 7.7 percent. The national average is 4.7 percent.
The mortgage problems here in Florida, and back home in California were fueled primarily by a speculative bubble, lenders who were too lenient, and borrowers who made bad decisions. In the Midwest, where five of the seven leading states in loan losses are located, the economy is a major factor.
Housing is a lagging indicator of economic decline, and there were 340,000 jobs lost in Michigan since 2001.
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