Outstanding residential mortgage debt in the U.S. will continue to fall over the next three quarters before stabilizing in mid-year 2012, according to a new forecast from Freddie Mac.
According to the GSE's economics department, residential debt (servicing rights) will fall by 1.5% in the third quarter and another 2% in the fourth.
Freddie sees a further decline of 1% in 1Q 2012 before consumers increase their mortgage debt loads by 2% in the second quarter.
The figures are part of Freddie Mac's ‘September 2011 Outlook Report.' No detail is given on the numbers, but the GSE has noted several times before that borrowers increasingly are engaging in ‘cash-in' refinancings where they actually bring money to the closing table in an effort to reduce debt.
Moreover, over the past two years real estate investors have been bottom fishing in the housing market by purchasing homes with cash or private deeds instead of taking out traditional loans.
According to figures compiled by National Mortgage News, Americans owed $9.292 trillion on their home loans at June 30, a 6% decline in residential debt outstanding over 12 months.
