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Mortgage Payment Reset: only a 1% problem

Mortgage Payment Reset: The Rumor and the Reality.

Our nation is a $10 trillion-per-year economy currently possessing
$19 trillion in household asset value and $11 trillion in homeowner’s
equity. Losses of $110 billion – spread over several years – would
come to only about one percent of the total national homeowners’

Currently the economy is growing at about 3 percent per year,
adding about $300 billion per year to our national income. Losses
of $30 billion in a year would consume only one-tenth of this
increase, the equivalent of slowing the growth rate from 3% to 2.7%.
According to the Mortgage Bankers Association of America, mortgage
lending totals from $2 trillion to $3 trillion per year. The yearly reset
losses anticipated by this paper would constitute only about one
percent of the total annual lending amount.

Christopher Cagan, director for research and analytics at
First American Real Estate Solutions. PDF
[via NYT]


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