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HOME FORECLOSURE RISK HIGHEST IN NY, NJ, CT, FITCH SAYS --FITCH FINANCIAL WIRE --

 NEW YORK, July 13, /PRNewswire/ -- Homeowners in New York, New Jersey and Connecticut face the highest foreclosure rates in the nation over the next five years, Fitch's new Mortgage Default Model shows. Also hardest-hit will be New England, Florida, Louisiana, Oklahoma and Arkansas.
 In much of New Jersey lenders will foreclose an average 170 of every 10,000 mortgages. That's more than twice the average for the U.S. as a whole, projected at 74 of every 10,000. Foreclosures occur when mortgage payments default due to financial distress, job loss, divorce, or illness.
 Surprisingly, San Francisco and Los Angeles straddle the national average while foreclosure risk elsewhere in California is lower than for the U.S.
 The fewest foreclosures should occur in Washington State, Delaware and the
Washington-Maryland-Virginia corridor. The midwest, Rocky


Mountain states and Pacific Northwest also have low default risk.
 The Fitch model carves the nation into 43 regions, then evaluates credit losses in pools of residential mortgages by projecting foreclosure rates and housing value trends. Results are used to help determine credit enhancement levels for ratings on non-investment grade (`BB' through `CCC') and lower investment grade (`BBB') mortgage debt. Overall, more than $1.2 trillion of mortgage-backed securities (MBS) pools are held by mostly large institutional investors.
 The model, for the first time, gives investors the analytical capability to evaluate future losses on mortgage-backed securities based on trends in economic activity. To gauge a region's economy, Fitch looks at unemployment, employment growth, personal income, industry diversification, population growth, housing starts and home sales. These help forecast foreclosure risk and real estate values which drive credit loss expectations.
 Over three-years, median home prices should increases from 27.21 percent for the Boston area to only 5.17 percent for much of New Jersey, the Default Model shows. Foreclosures and housing values are based on regional economic variables provided by The WEFA Group. Projections are updated quarterly as new data become available.
 -0- 7/13/93
 /CONTACT: James Nadler, 212-908-0538, or Greg Raab, 212-908-0536, both of Fitch/


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MP -- NY039 -- 0846 07/13/93 11:26 EDT
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Publication:PR Newswire
Date:Jul 13, 1993
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