A study by Freddie Mac has found that illness and excessive debt are gaining ground on job or income loss as the leading cause of mortgage delinquencies.Freddie Mac said unemployment and income losses caused 36% of delinquencies among Freddie Mac loans in 2006, down from 43% between 2001 and 2005. But delinquencies caused by excessive financial obligations rose to 13.6% last year, up from 11.1% in prior years. Late payments linked to a borrower or family illness rose from 19.2% to 21.1%. Noting that only 0.53% of Freddie Mac loans were 90 or more days overdue at the end of 2006, chief economist Frank Nothaft said the drop in job- or income-based severe delinquencies reflects increases in payroll jobs outside the manufacturing sector. "But the increase in late payments due to excessive debt is potentially troubling because it is independent of economic trends and suggests some borrowers are having a harder time handling their financial obligations than in past years." Freddie Mac can be found online at http://www.freddiemac.com.

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