Obvious from a logical perspective, I just read an article that said people will pay credit cards before paying their mortgages. Why? Because "You cannot buy groceries with your house". People are rational.
"In California, the percentage of consumers delinquent on mortgages, but current on their credit cards increased from 3.5 percent in the third quarter of 2007 to 10.2 percent in the third quarter of 2009. In Florida, this same variable increased from 5.1 percent to 12.4 percent. In this same time frame, the United States increased from 4.0 percent to 6.6 percent."
Interesting stuff.... yet another reason why the housing market is far from the bottom. Too many foreclosures + shadow inventory + resetting ARMs + continuing increases in unemployment = we can't see the bottom yet
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