Based on current real estate market conditions, it is estimated that one in five home loans will likely default. These defaults will come from a wide range of mortgage situations. When you dig deeper into who these homeowners are, you find that they are not just the ones that are currently non-performing or 60 days past due.
The foreclosures will come from homeowners that have been behind in the past but are current now. These homeowners have a high probability of eventually losing their homes. Other sources of foreclosures are currently performing loans that are at various stages of negative equity. It is estimated that nearly half of all mortgages that have loan-to-value ratios above 120% will default.
It will be interesting to watch how these looming foreclosures will affect the real estate market in 2012.
Daniel DiGuglielmo - Your Mortgage BankerNMLS # 267473E-mail: DanielD@AliantBank.com100 Century Park South, STE 200Birmingham, AL 35226 Fax: 205-823-5403 Phone: 205-823-1727
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