Real estate hot spots highlighted in CMRMMortgagePress.comforecasts the relative risk of residential mortgage loan delinquencies due to fraud propensity and collateral risk
CoreLogic has released the
results of its first quarter Core Mortgage Risk Monitor (CMRM), a
quarterly publication tracking an economic index that forecasts the
relative risk of residential mortgage loan delinquencies due to
fraud propensity and collateral risk, house price dynamics and the
health of the local market economy. An elevated Core Mortgage Risk
Index signals the increased potential for financially-disruptive
and costly economic consequences for consumers, their local
community and the mortgage industry. The CMRM examines 379
metropolitan statistical areas (MSAs) in the United States,
representing 89 percent of the population.
Based on fourth quarter 2006 data, among the largest 100 MSAs
(the top 100 MSAs represent 66 percent of the U.S. population), the
top five markets most at risk over the next six months include:
-Memphis, Tenn.
-Detroit-Livonia-Dearborn, Mich.
-Youngstown-Warren-Boardman, Ohio-Pa.
-Warren-Troy-Farmington Hills, Mich.
-Indianapolis-Carmel, Ind.
Relative to the base period of the first quarter of 2002, the
2006 fourth quarter Index completes a year of relatively low risk,
in contrast to the prior three years. A driving force behind these
results is the continued decline in the unemployment rate, which
remains at historically low levels. At this time, the negative
effects of a slowdown in housing costs are being offset by the
positive effects of low unemployment.
While overall house price appreciation has stopped its slide and
risen slightly from five percent in the third quarter of 2006 to
just over six percent in the fourth quarter of 2006, many markets
continue to experience house price declines. The top 10 riskiest
markets among all 379 markets monitored have a consistent pattern
of house price depreciation, higher than average unemployment,
lower than average wage growth and higher than average fraud and
collateral risk. According to the Index, one particular region to
watch is the Florida area, most notable the Fort Lauderdale, Tampa
and Jacksonville areas that are currently low risk, but appear to
be quickly moving out of this category. All three have moved up
their risk ranking by more than 11 places over the third quarter of
2006.
The CMRM also finds that fraud and collateral risk, components
of the overall risk index, continue to rise, posting the ninth
consecutive quarterly increase. It is currently growing at an
annualized rate of 2.4 percent. Foreclosure activity remained
higher in 2006 than in years past. CoreLogic models have previously
revealed that a five percent increase in the foreclosure rates
increases the likelihood of fraud by more than 20 percent.
For more information, visit www.csmarketing.com.
