Rescued Mortgage Holders to Default Again
Most modifications of nontraditional loans will fail within a year, predicts Fitch Ratings, which studied the issue.Fitch’s study examined subprime mortgages, jumbos and no-doc loans and concluded that 55 percent to 65 percent will be at least 60 days delinquent within 12 months of being reworked.
Fitch based the projection on shrinking disposable income, escalating job losses and possibly some deceptive practices on the part of the borrowers themselves, the company said.
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