Mortgage Risk Rises as Cashout Transactions Grow

An increase in the volume of cashout originations is creating more risk for mortgage investors, according to a new ratings agency report.

Although rising home prices have created more equity for mortgage holders, it is also motivating homeowners to extract equity from their homes

Cashouts are increasing on loans backed by the government-sponsored enterprises and on mortgages included in private-label securitizations.

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From:: Financing