Friday, December 09, 2005

The Defaulting Homeowner

Bonds backed by home loans to the riskiest
borrowers, the fastest growing part of the $7.6
trillion mortgage market, have lost about 2.5
percent since September on concern an 18-month
rise in interest rates may force more than
150,000 consumers to default.

As I've said before, most of the housing loans are
made with variable-rate mortgages. As interest
rates go up, so will the defaults.