That sinking feeling

As property prices continue to drop, so loan-to-value ratios rise and more loans are dragged underwater. Barclays Capital's Ajay Rajadhyaksha asks what this means for the market

I woke up some days ago to a curious, unsolicited email. It urged me to "walk away" from my mortgage. This tactic, the email insisted, would let me stay for free in my house for several months, through the process of foreclosure. Despite the prevalence of such emails, however, fears of 'good' borrowers walking away are, I believe, exaggerated, at least for now. But there is no denying the influence of falling home prices on a borrower's tendency to default.

A borrower who is financially stretched

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Most read articles loading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here