2007-12-04researchrecap.com

``The second major finding of the study is that the dominant factor in generating foreclosures is housing price appreciation. According to the authors, the probability of default for subprime and prime borrowers increases significantly in period with low or negative price appreciation.''

Here's another way to put it: if you're leveraged to the hilt, and prices go down, you're screwed. Maybe the Federal Reserve will endorse me for an honorary economics PhD now?



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