UNIVERSITY PARK, Pa., Aug. 7 (UPI) -- Job loss and unexpected medical bills are the main reason for home foreclosures in Pennsylvania, not subprime mortgages, a survey indicates.
Austin Jaffe, a consulting economist for the Pennsylvania Association of Realtors and of the Smeal College of Business at Pennsylvania State University, says subprime mortgages -- which many regard as the main culprit in the meltdown of the U.S. housing market -- appear to have played a minor role in Pennsylvania foreclosures. Subprime mortgages are loans in the riskiest category and are typically sold in a separate market from prime loans.
The survey, commissioned by the Pennsylvania Association of Realtors, indicates of the Pennsylvanians who encountered home foreclosure during the last 12 months, 41 percent held prime fixed-rate mortgages, 12 percent had prime adjustable-rate loans and 14 percent carried a subprime mortgage.
The polling firm Strategic Guidance Systems, based in Florida, conducted the survey June 22-27 and says 57 percent say their household had experienced a wage-earner's job loss in the 12 months prior to their foreclosure, while 47 percent say they had been hit by unexpected medical bills and 36 percent say they had other "unexpected bills."
Most of the survey respondents were ages 40-59 and at the time of foreclosure and 71 percent had lived in their home for more than 5 years. The survey has a margin of error of 4 percentage points.