First American CoreLogic Says Homeowners 12 Percent More Likely to Default in Q4

""First American CoreLogic"":http://www.facorelogic.com, a member of ""The First American Corporation"":http://www.firstam.com family of companies, today released the latest issue of its Core Mortgage Risk Monitor (CMRM). The CMRM forecasts delinquency risk for the real estate and mortgage industry, providing a barometer on the areas that are the most and least risky in terms of homeowners facing foreclosures due to mortgage default. According to the fourth quarter study, the likelihood that homeowners will default on their mortgages increased by 12 percent from a year ago and is up 54 percent from early 2002, the base year used in the analysis.
""The rate of home price decline, an important factor in assessing likely delinquency risk, has stabilized at around 11 percent, with almost zero acceleration in either direction,"" said Mark Fleming, chief economist with First American CoreLogic. ""Because this rate is not increasing, home price declines are not raising the national risk index further at this time, but they're not reducing the risk either.
""While the risk index has been driven upward throughout 2007 and 2008 primarily by the acceleration of declines in home prices, there is now a geographic expansion of risk driven by fundamental economic conditions. Flat or declining wages and increasing job losses are beginning to affect the index more heavily in many markets,"" Fleming explained.
California tops the most-likely-to-default list with seven of the eight riskiest markets, including the top three--Riverside/San Bernardino, Los Angeles, and Sacramento. Florida is second on the list with one city--Miami--in the top 10 and several other cities, including Fort Myers and Port St. Lucie, also having high risk factors.
Dayton, Ohio, is the least riskiest market for homeowner default, according to First American's CMRM. Indianapolis, Indiana; Austin, Texas; Omaha, Nebraska; and Wichita, Kansas, are also among the five least risky markets.
The Core Mortgage Risk Monitor is a quarterly report that provides analysis of 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. The CMRM tracks risk in 381 metropolitan markets across the United States representing more than 89 percent of the country.
To view First American CoreLogic's full report, including the 10 highest risk markets and the 10 lowest risk markets, ""click here"":http://www.facorelogic.com/uploadedFiles/Newsroom/Mortgage/CMRM-Q4_final_112108(1).pdf.