Rising Debt Could Lead to Foreclosures in the Future.(Brief article)

WASHINGTON -- Because of the increasing debt burden of American households, residential foreclosure rates could increase in the near future, according to speakers at a conference here. Panelists at a Center for American Progress meeting said that for the first time ever U.S. families have outstanding debt levels that exceed their incomes.

Christian Weller, a senior economist for CAP, noted that household debt includes first liens, home-equity lines of credit and credit card payments.

Mr. Weller said the cost for such middle-class expenses as housing, health care, education and transportation have risen faster than prices in general. As a result, he said, households increasingly are going into debt to pay "necessities" such as their mortgage.

Mark Zandi, chief economist for Moody's Economy.com, noted that lower-income families are generally new homeowners. Mr. Zandi fears that credit problems "will intensify in the long run for lower-middle-income households."

He said the response should ...