The Impact of Price Trends on Mortgage Defaults

first_img  Print This Post Radhika Ojha is an independent writer and copy-editor, and a reporter for DS News. She is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her masters degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha, also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Houston, Texas. Data Provider Black Knight to Acquire Top of Mind 2 days ago A number of factors drive default rates in mortgage, but a new study by Collateral Analytics has found that price uncertainty and actual and expected home equity are important drivers.To reach this conclusion, researchers  Dr. Michael Sklarz, Dr. Norman Miller, and Anthony Pennington-Cross analyzed the typical pattern of mortgage default in response to negative price trends and high loan-to-value (LTV) mortgages using Chula Vista, California as an example since it was a market with higher than average LTV loans. Then they compared several local markets in San Diego County by ZIP code where average LTVs and the use of mortgages varied systematically to create a map of ZIP codes with default rates.Explaining their rationale behind the study, the researchers said, “When home values decline to the point where borrowers have no equity or negative equity, and they see no immediate reversal in local price trends, they often decide to default. This is sometimes called “rational default” or “strategic default”, and while it may affect credit ratings for some time, U.S. borrowers know they will seldom be chased for mortgage balance deficiencies. This encourages the decision to default when the mortgage balance appears to exceed the value of the home. This creates a situation where mortgage lenders are on the short end of a “heads I win, tails you lose situation”. If prices go up, borrowers’ benefit, but if prices go down too far, the mortgage lender suffers.”Looking at Chula Vista, the researchers found that loans originated in 2000, 2001, 2002, and 2003 were the beneficiaries of strong price increases of 12 percent, 14 percent and 25 percent in average home prices, so when prices reversed in 2006 “there was still sufficient cushion to preserve real home equity” when other factors for default such as income to mortgage payment ratio, credit behavior, job loss, and available liquid assets to make mortgage payments were not taken into consideration.However, mortgage loans originated in 2004 saw increasing default rates peaking out in 2007 as home prices started to decline. The study found that of the loans originated between 2005 and 2007 at the peak of home prices during that cycle, half or more defaulted in the subsequent years. “The high LTV loans declined as subprime loans disappeared, however, the FHA and loan modifications allowed many homeowners to continue with high LTVs through 2012,” the study revealed.Expanding this example to other markets, the researchers observed that markets with higher LTV mortgages and similar price trends as Chula Vista defaulted at much higher rates, making it clear that “home price trends dominate the decision of home borrowers to default.” Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago Previous: Regulation Vs. Added Costs Next: Top 5 Affordable Markets Demand Propels Home Prices Upward 2 days ago in Daily Dose, Featured, Foreclosure, News The Best Markets For Residential Property Investors 2 days ago Related Articles December 5, 2018 5,841 Views Share Save The Best Markets For Residential Property Investors 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago About Author: Radhika Ojha Governmental Measures Target Expanded Access to Affordable Housing 2 days ago The Week Ahead: Nearing the Forbearance Exit 2 days ago Demand Propels Home Prices Upward 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago Home / Daily Dose / The Impact of Price Trends on Mortgage Defaults 2018-12-05 Radhika Ojha The Impact of Price Trends on Mortgage Defaults Sign up for DS News Daily Subscribelast_img read more


first_imgInishowen Engineering Reserve First Division Reports Cockhill Colts 0-1 Rasheney ResThis was a close hard fought encounter with few chances and defences on top for long periods.The visitors made an early breakthrough when they opened the scoring on 5 minutes when Charlie Doherty fired low past Liam Lynch after the colts defence had failed to clear.The colts had plenty of possession for the next period of the game but they failed to trouble Sean Friel in the Rasheney goal.The visitors spurned a great chance on 39 minutes when Kevin Noone was upended in the area but Darren Doherty’s spot kick was superbly saved by Lynch.The second half followed the same pattern as the opening period with defences dominant and few chances.Midway through the half Rasheney’s went close again but Charlie Doherty’s effort was cleared off the line by substitute Gary Roninson.The colts best chance came very late on when following a corner the ball broke to Robinson but he fired just over from twelve yards.  Illies Res 1-5 Redcastle Res League leaders Redcastle began well and took the lead on 11 minutes when Stephen Bonner steered home and Antonio Rea cross from twelve yards. They doubled their lead midway through the half after a great ball from Robert McLaughlin found Liam Mclaughlin who fired low past Christy McCallion.Illies responded and when Liam Doherty picked out John Hutchinson he headed wide when well placed.A poor clearance by the home defence allowed Bonner to grab his second on 33 minutes and just after this the home defence failed to clear and Aiden Cunningham fired low to the net to make it four nil.Illies started the second period better and both Liam Doherty and Charlie Mclaughlin had efforts saved by Ryan McCole before Jamie McCarron had an effort from distance just wide.Redcastle upped the ante and scored their fifth when Liam Mclaughlin broke on the right and crossed for substitute Emmet McConway to drill low past McCallion.Illies got a consolation after Charlie Mclaughlin was upended in the area and he picked himself up to convert.The visitors were reduced to ten men late on when Rea was redcarded for dissent but from the free kick McCarron fired just over.  Moville Youths 3-1 Greencastle Res There was a dour opening to this derby clash with play bogged down in midfield until the 25th minute when Colin Doherty released Brian Orr but Seamus Bovaird advanced to smother.At the other end James Henry released Cathal Kelly but he fired just over the bar.Moville then took the lead on 40 minutes when Kevin McDermott converted a penalty low to the right after Doherty was upended.On the stroke of half time Doherty broke clear but his effort was saved by Bovaird.Greencastle got the perfect start to the second period when they got back on terms on 47 minutes after Henry found Kelly on the edge of the area and he controlled before drilling past Lee McElroy in the home goal.Moville upped the pace with Gearoid McQuillan firing just wide before they regained the lead on the hour mark after a low free from Conor Radcliffe was poked home from close range by Doherty.Moville were on top now and Radcliffe and Orr combined for the latter to fire over before McDermott releaed Doherty and he slid the ball past the advancing Bovaird to make it three one. Greencastle had the final chance when Jamie McCormick squared for James McDermott but he fired over when well placed. Rasheney Rovers 1-2 Dunree Res This game was reversed to Dunree and they were first to show when David Eccles saw his long range effort turned round the post by Declan Grant.Rasheney responded with Fergal Doherty breaking clear on the right but his poor delivery was gathered by Philip Doherty.Dunree took the lead on 29 minutes when Emmet Dunphy advanced on the right and crossed for Thomas Doherty to head home from close range.Tey went close again before the interval when Constantin Bamica saw his looping effort drop just over.On the restart Dunree were first to show again after Dunphy fed Doherty in the area and although he controlled well he was crowded out by the Rasheney defence.Rovers replied with substitute Eoin Sweeney laying the ball off for Brendan Grant but he failed to hit the target.On 65 minutes Bamica for Dunree fed Doherty but he fired straight at Doherty who gathered well.Rasheney upped the tempo at this stage with Grant breaking clear on the left but his low shot was well saved by Doherty before substitute Ken McCandless advanced into the area only for Doherty to smother.Rasheney got back on terms on 79 minutes when Ryan Gill crossed for Fergal Doherty to send a looping header over Doherty in the Dunree goal.But Dunree hit back within minutes to retake the lead after Michael Grant fed Thomas Doherty who laid off for John Doherty to drive low to the net from fifteen yards.Dunree had another chance when Neil Moran broke clear but he shot wildly wide when well placed.Rasheney almost snatched a point on 88 minutes after a long range Gill shot was palmed out by Doherty but there were no takers for the rebound.With Rasheney pushing forward Dunrees Sean Henderson squandered two late chances to increase the lead.Inishowen Engineering Reserve First Division TablePPtsRedcastle925Rasheney Res922Moville Youths1016Cockhill Colts812Dunree79Rasheney Rovers109Illies87Dunree66Greencastle83INISHOWEN FOOTBALL LEAGUE: EVERY REPORT FROM THE INISHOWEN ENGINEERING RESERVE FIRST DIVISION was last modified: February 3rd, 2013 by BrendaShare this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Reddit (Opens in new window)Click to share on Pocket (Opens in new window)Click to share on Telegram (Opens in new window)Click to share on WhatsApp (Opens in new window)Click to share on Skype (Opens in new window)Click to print (Opens in new window) Tags:COCKILL COLTSDunreeGreencastleilliesINISHOWEN FOOTBALL LEAGUE: EVERY REPORT FROM THE INISHOWEN ENGINEERING RESERVE FIRST DIVISIONmovilleRASHENEY RESredcastlelast_img read more