Oxford Funding: Crisis Will 'Dwarf' That of '90s

The current mortgage market crisis is likely to far exceed that of the early 1990s because of surging defaults and foreclosures related to interest rate resets on adjustable-rate mortgages, according to Robert Dunn, president of Oxford Funding Corp., a Houston-based asset resolution company."During the mortgage crisis of the early 1990s, I personally managed the acquisition, restructure, and resale of over $750 million in secondary mortgage assets," Mr. Dunn said in a statement. "I expect that our current mortgage market crisis will dwarf what we saw back then for a number of reasons. We see defaults and foreclosures rising dramatically in the near future, as over $650 billion of loans to subprime borrowers are scheduled to reset at higher interest rates by 2009." Mr. Dunn also said the Federal Reserve "seems intent on raising interest rates to fight inflation, and we've seen before what a rising interest rate environment does to all debt markets, especially mortgages. As underwriting standards have also been tossed to the wind over the past few years, we feel a significant spillover of defaults to the alt-A market and even into the prime credit market is highly likely." Oxford Funding can be found online at http://www.oxfordfunding.com.