Rising risk in mortgage market
People walk past a mortgage advertising stand.
A new report from the American Enterprise Institute suggests that home-buyers are more likely to default on new mortgages.
The mortgages were subjected to a stress test. Under the worst case scenario, an increasing percentage of the loans would fall into foreclosure.
But when considered historically, housing consultant Thomas Lawler says new mortgages are, “Substantially lower in terms of overall risk than any time in 20 plus years.”
Lawler says the risk of another all-out housing crisis is much lower because fewer mortgages are backed with borrowed money.