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Sunday, October 21, 2007

Mortgage delinquency risk rising

October 19 2007
As housing markets deteriorated over the summer, and a liquidity squeeze buffeted credit markets, delinquencies and defaults jumped. And now one forecast predicts that these numbers will climb even higher over the next six months. The Core Mortgage Risk Monitor , an index of foreclosure risk compiled by First American CoreLogic, increased by 1.6 percent compared with the three months ended June 30. The index predicts the chances that future mortgage loan delinquencies will occur and is based on such factors as fraud propensity and collateral risk (the accuracy and sustainability of home prices paid), house price dynamics and the health of local market economies. High risk markets also have job issues such as high unemployment of low wages and wage growth, all indications of economic stress. By contrast, the lowest risk markets have low unemployment, high-paying jobs and solid job growth, moderate house price appreciation, low foreclosure rates, and minimal fraud and collateral risk.

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