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Bankers Pessimistic About Future of Mortgage Delinquencies

""FICO's"":http://www.fico.com/en/Pages/default.aspx second-quarter survey of bank risk professionals reveals pessimism in regards to expected mortgage delinquencies in the second half of 2011.


While 46 percent of respondents expected mortgage delinquencies to rise over the next six months, 18 percent expected them to decline.

The numbers were similar in regards to delinquencies on home equity lines of credit, where 46 percent of respondents expected delinquencies to rise, while 22 percent expect them to decline.


""This isn't surprising given the fact that average home equity in the U.S. has dropped from 61 percent in 2001 to 38 percent today,"" said Dr. Andrew Jennings, chief analytics officer at FICO and head of FICO Labs.

""With millions of homeowners under water on their mortgages, it is very hard to see the light at the end of the tunnel. It is likely to take years to work through all the troubled mortgages,"" Jennings said.

The survey also found bankers to be pessimistic about small businesses, with a plurality of respondents predicting higher delinquencies on small business loans.

While 33 percent expected small business delinquencies to rise, 28 percent expected them to decline.

On the other hand, bankers were somewhat optimistic about consumer credit. Thirty-one percent expected credit card delinquencies to fall, and another 38 percent expect credit card delinquencies to remain at their current level over the next six months.

FICO's Quarterly Survey of Bank Risk Professionals is conducted by the ""Professional Risk Managers' International Association"":http://www.prmia.org/ and analyzed by the ""Columbia Business School."":http://www4.gsb.columbia.edu/

About Author: Krista Franks Brock

Krista Franks Brock is a professional writer and editor who has covered the mortgage banking and default servicing sectors since 2011. Previously, she served as managing editor of DS News and Southern Distinction, a regional lifestyle publication. Her work has appeared in a variety of print and online publications, including Consumers Digest, Dallas Style and Design, DS News and DSNews.com, MReport and theMReport.com. She holds degrees in journalism and art from the University of Georgia.

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