One in Five Predicted to Default

September 20, 2011
mortgage lending news

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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