Tag Archives: Mortgage Risk

Nearly 12 percent of home purchase loans in today’s market run the risk of default in the event of an economic downturn, according to a new report from the American Enterprise Institute’s (AEI) International Center on Housing Risk. According to AEI, last month’s rising index was caused largely by the Federal Housing Administration (FHA) and Rural Housing Services (RHS) increasing their market share, which was up to an estimated 32.2 percent in April.

The American Enterprise Institute (AEI) put out a “flash release” of its National Mortgage Risk Index (NMRI), a measure of the likelihood of purchase loan defaults under stressful economic conditions. According to the group, the index climbed last month to 11.89, indicating nearly 12 percent of loans would be at risk of default in the event of another downturn. That figure is up from a reading of 11.5 percent in March and represents a series high for the index.

The American Enterprise Institute’s (AEI) International Center on Housing Risk released this week its latest National Mortgage Risk Index (NMRI), a measure of likely loan default rates in the event of another economic crisis. For its March data, the group calculated that under stress, 11.5 percent of recent home purchase mortgages would default, just down from 11.6 percent in February.

The American Enterprise Institute's National Mortgage Risk Index (NMRI), a measure of loans’ default risk under stressful conditions, retreated to 11.6 percent last month from January’s reading of 11.8 percent. To gauge where February’s index lies historically, 1990 vintage loans would have an estimated index value of 6 percent, while riskier 2007 loans would be up at 19 percent.