The Gorman Blog

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Mortgage and Lending with Gorman and Gorman Residential Lending

Who is more likely to default on their home loan, someone with a high credit score or a low credit score? Research has found that homeowners with high scores when they apply for a loan are 50% more likely to "strategically default" -- abruptly and intentionally pull the plug and abandon the mortgage -- compared with lower-scoring borrowers. Check out findings from the report from this article from the Los Angeles Times.

High U.S. unemployment keeps pushing up the rate of mortgage delinquencies for both good and marginal credit borrowers alike. Even though the housing market and economy are still tentative, homebuilder Lennar Corp feels the housing market feels materially better than the hopelessness that had existed over the past few years.

Many experts point to low interest rates as one of the main reasons why the housing market has been able to reverse its downward trend. The Federal Reserve has been able to keep mortgage rates near historic lows, it's unclear how long that will last. There's considerable uncertainty beyond the fall because the Federal Reserve at some point will stop buying mortgage-backed securities that have helped to keep rates low. Economists widely believe the central bank will keep interest rates between 0% and 0.25% at the conclusion of its two-day meeting beginning today.

Comments (1)

Edward & Celia Maddox
The Celtic Connection Realty - Queen Creek, AZ
EXPERIENCE & INTEGRITY - WE TAKE THE HIGH ROAD

Until we can improve the employment rate, we will just be fight fires to keep afloat.

Sep 22, 2009 02:43 AM