Released: December 20, 2006

Dim forecast for risky mortgages

Source: Kirstin Downey, Washington Post (Free Registration)

About 2.2 million homeowners with high-interest mortgages have lost their homes to foreclosure or could do so within the next several years, according to a report from a nonprofit group that opposes predatory lending.

The Washington region is likely to be especially hard hit, according to the report released yesterday by the Center for Responsible Lending in Durham, N.C. That’s because as prices here soared in recent years, many people took out high-cost loans, also called subprime loans.

Neighborhoods with many black and Hispanic homeowners and new developments with many first-time buyers will be most affected, said Keith Ernst, senior policy counsel at the center. Those groups were most likely to pay high interest rates because of weak credit and minimal down payments.

The top officer of the trade group for real estate agents joined center officials at a news conference yesterday to discuss the study. “We fully share the concerns of the Center for Responsible Lending,” said Pat Vredevoogd Combs, president of the National Association of Realtors. “Far too many families are at risk of losing their homes to foreclosure.”

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