A new study shows that homeowners who have fallen behind on their mortgage payments are much less likely to catch up again. The report focuses on a downturn in the “cure rate” for mortgage securities. The cure rate is the portion of delinquent loans that return to current payment status each month. The study found that the cure rate for prime loans dropped to 6.6% as of July from an average of 45% for the years 2000 through 2006.
This report may have an impact on the housing and financial markets, but it is really just pointing out the obvious and providing numbers as support. At our stage in the economic crisis, a month-by-month analysis would seem more helpful than a 2000-2006 report. This is because the statistics found in the report can help to predict the precise point when the markets will begin to turn upward.
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