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Mortgage Market Breakdown by Equity/Delinquency

Posted By Barry Ritholtz On October 14, 2010 @ 11:46 am In Credit,Real Estate | Comments Disabled

Click for larger graph


Laurie Goodman and the Amherst Securities Group tries to determine the size and scope of the housing problem:

This article summarizes the size and scope of the housing crisis, making the point that if governmental policy does not change, one borrower out of every 5 is in danger of losing his/her home. A crisis of this order of magnitude requires both supply and demand side measures. On the supply side, a successful modification is critical. This will require principal reductions to re-equify the borrower. The moral hazard (strategic default) issues must be addressed by first recognizing that this is an economic issue, not a moral one. Second liens must also be addressed. As supply side measures alone are likely to prove insufficient to address a crisis of this size, we discuss demand side measures to increase the buyer base.

The full report, if you can track it down, is here [2] and worth reading.


The Housing Crisis—Sizing the Problem, Proposing Solutions
Amherst Mortgage Insight, October 1, 2010


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[1] Image: http://www.ritholtz.com/blog/wp-content/uploads/2010/10/Equity-Delinquency.png

[2] is here: http://www.politico.com/static/PPM170_101006_amherst.html

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