Tuesday, November 1, 2011

Strategic default risk growing for negative equity jumbo mortgages

More people are just walking away.
Loans considered always current or those with LTV ratios below 100% are shrinking in the jumbo space. In September 2011, these loans made up less than 35% of the jumbo universe, down from more than 50% in November 2009.
"Indeed, default rates among always- current borrowers have not come down as much as in the subprime sector, meaning that the pool of current borrowers has not strengthened as much over time," Moody's said.
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