Lenders Bracing For More Defaults
A survey by Phoenix Management finds a majority of lenders expect to see "softening" in their loan portfolios over the next six to 12 months.
In addition, 43% of lenders participating in the quarterly survey said their lending institution would likely allocate more resources to distressed portfolio management in the coming 18 months. The rest predicted that they would make no change in this area.
"This quarter, a number of indicators that we track through lender surveys are beginning to trend downward, most notably lenders' predictions about softening loan portfolios," said Michael Jacoby, managing director at Phoenix Management Services.
"Lenders are telling us they are on the alert for a coming economic downturn, perhaps as soon as 12 months from now."
For the second half of this year, lenders predicted the economy would perform at a "C+" grade level, down from the "B-" they predicted last quarter. (c) 2006 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com