One in Five Predicted to Default
September 20, 2011
According to Amherst Securities Group, nearly one in five U.S. homeowners could
eventually default on their mortgage unless Congress adopts new policies to
prevent it. Amherst senior marketing director Laurie Goodman said in Hill
testimony that approximately 10.4 million homeowners out of 55 million who
currently have mortgages are likely to default and lose their homes in the next
few years. The number is more than double the current number of home loans in
default, 4.5 million. Even the company's most conservative estimate predicts at
least 8.3 million homes lost to default over the next six years. The firm
expects that 65 percent of homeowners with previous delinquencies will default,
while 40 percent of those at least 20 percent underwater are projected to
default. Goodman said that, in order to avoid this scenario, Congress must
increase the rate of successful loan workouts and increase demand to reduce the
glut of foreclosures.
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