20% Increase of Defaults Speculated by UFA

By Liz Clinger Updated on 6/12/2012

The University Financial Associates of Ann Arbor, MI put out the latest UFA Mortgage Report indicating that under current economic conditions, lenders should be expecting around a 20% increase in default loans or foreclosures than similar types in the 90’s due to local and national economic environment.

The University Financial Association Default Risk Index measures risks of default on new originations of prime and non-prime mortgage loans. The analysis of the UFA Default Risk Index is based on a “constant-quality” loan or loan with the same borrower, loan and collateral characteristics, while only reflecting changes of current and speculated future economic conditions.

Dennis Capozza, a founding principle of the UFA, among other things, stated “The worst is clearly over so that mortgage lenders can comfortably loosen credit for newly originated loans.”