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Homeownership Rate Likely to Continue Falling: Capital Economics

For the first quarter of 2012, the Census Bureau reported the homeownership rate dropped to 65.4 percent, which was a yearly (66.4 percent) and quarterly drop (66.0 percent). Even more significant was the fact that rate had never seen such a low since the first quarter of 1997 when the rate was also 65.4 percent. In a report, Paul Diggle of Capital Economics wrote, ""it's plausible that tight credit, subdued confidence and many more foreclosures will drive the homeownership rate down to 64%.""

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Mortgage Defaults Down in June, Index Reveals

An already positive trend in mortgage defaults continued through the month of June, according to data released Tuesday in the S&P/Experian Consumer Credit Default Indices. The data shows that most loan types-including bank card and first and second mortgage loans-saw a decrease in default rates, many of them for the sixth consecutive month. Four loan types posted their lowest rates since the end of the recent recession.

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Credit Scores Rising, LTVs Dropping on New Mortgages: Report

Mortgage lenders remain cautious in terms of credit quality, down payments, and valuations, as evidenced by the findings outlined in the new Origination Insight Report generated by Ellie Mae. The report series tracks the current lending environment for refinance and purchase mortgages, and it indicates the average credit score for loans approved and closed is steadily rising, while acceptable loan-to-value (LTV) ratios are declining. Ellie Mae says mortgage loans closed in February carried an average credit score of 750, with an LTV of 76 percent.

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Credit Trends Among U.S. Consumers Point to End of Housing Downturn

Consumer credit data suggests spending will increase and the housing market will begin to emerge from its slump this year, according to Equifax and Moody's Analytics. Both companies note that as key market data align with pre-recession totals, consumers should anticipate steady economic growth for major credit sectors, including auto, bank card, and consumer finance. While the mortgage lending sector continues to see the highest percentage of delinquencies, it too is showing signs of increased traction in the coming months.

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Consumers Still in Distress Despite Job Gains and Credit Boost

Overall, the addition of 683,000 new jobs and the best credit picture in more than 15 years helped improve the financial health for the average U.S. household, but these gains were offset somewhat by a decline in net worth and tight household budgets, according to the Q4 2011 report from CredAbility. A score below 70 indicates financial distress, with U.S. households scoring 67.6 on the 100-point scale for this quarter, a smidge higher than the previous quarter, which was at 66.7.

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Housing Crisis to End in 2012 as Banks Loosen Credit Standards

Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit. The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago. Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes ""the clearest sign yet of an improvement in mortgage credit conditions.""

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Deloitte Zeros In on Servicing Strategies for First-Time Defaulters

The economic environment of the last several years has added to the ranks of first-time defaulters. According to a survey conducted earlier this year by Deloitte, 11 percent of bank customers fall into this category, meaning they have experienced their first default or serious delinquency because of the recent financial crisis and recession. Deloitte contends that servicing and default management strategies should be tailored to match these customers' needs to capture what will likely be a profitable segment over time.

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CoreLogic Introduces Credit Report Identifying Hidden Behavior, Debt

CoreLogic has launched a supplemental consumer credit report to help lenders mitigate risk by uncovering additional debt obligations, as well as increase new lending opportunities by identifying previously hidden credit behavior that could improve a consumer's credit profile. CoreScore consumer information is merged with traditional credit data into a single, integrated report. The supplemental data is sourced from CoreLogic's proprietary databases, which include nearly 1 billion consumer transaction records.

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Mortgage Delinquencies Have Risen 25% Since Pre-Recession

Mortgage delinquencies remain elevated while other aspects of the consumer credit picture, such as bankcard performance, are improving, according to a new report from Experian. The credit bureau says instances of 60-day mortgage delinquencies have risen by 25 percent from 2007, prior to the recession, while 60-day credit card delinquencies have decreased 20 percent since that time. Portland shows the greatest increase in missed mortgage payments, almost double since 2007.

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Ratings Agencies Assess Pro Forma Underwriting in New CMBS

As the second year of CMBS 2.0 begins, credit ratings agencies say they are taking stock of where credit quality stands and where it may be headed from here. With that assessment, conflicting views persist on the strength of the underwriting behind new commercial mortgage-backed securities (CMBS). While the real estate and financial crises invoked a tightening of credit and lending criteria, some say questionable practices, particularly related to appraisal assessments, have begun to make their way back into the picture.

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