It seems that most peoples are focused on unemployment, but the demise of small businesses could really hit the housing market hard. From the Mr. Mortgage blog:
Washington, D.C., November 21, 2008 – The nation’s small businesses own ninety-three percent of all “toxic” mortgages and are at risk of defaulting on their loans/payments. The data, released today by the National Association for the Self-Employed (NASE) in coordination with Prof. Samuel D. Bornstein and Jung I. Song, CPA of Bornstein & Song, CPAs and Consultants, shows that these “toxic” loans did not go to subprime borrowers. Rather, these “toxic” mortgages were targeted to small business owners who were prime and near-prime borrowers and may now find themselves facing sky-high monthly house payments. The results of the study were extrapolated based upon an estimated 16.2 million self-employed small business owners in 2007, according to the Small Business Administration’s Office of Advocacy.
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“These small business owners will be at-risk for “payment shock” and default as their monthly mortgage payments skyrocket during the “resets” that are scheduled to begin in 4th Quarter 2008 and continue through 2012,” said Prof. Samuel D. Bornstein of Bornstein & Song, CPAs and Consultants. “The resulting defaults will be the cause of the upcoming second “tsunami” wave of foreclosures that will dwarf the subprime crisis and will take many homeowners and small business owners.”
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