No mortgages for “riskiest” 15%?

Some interesting predictions in 8/6 WSJ article on mortgages.

The chief economist at Goldman Sachs says that 10% to 15% of those who would have qualified for a mortgage last year will not qualify this year because of tightened requirements.

Moody’s estimates that 2.5 million homeowners will default on their mortgages this year and next. Some (about 800,000) will keep their homes thanks to a loan modification or various refinancing packages, but 1.7 million will simply lose their homes.

In the last decade about 5 millon renters were turned into homeowners according to MIT professor Wheaton. He predicts that about two-thirds of those will now be turned back to renting.

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