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» WOMEN OWN LESS MORTGAGE DEBT, LESS LIKELY TO BE DELINQUENT Although data show women generally earn less income than men, results from a recent Experian study found women come out ahead when comparing how mortgage debt is managed. According to the study, men are more likely to have a higher mortgage loan amount compared to women, but men are also more likely to be delinquent by 60 days or more. "When looking closer at our data and crossreferencing it with other data sources, we see that women working full-time in the United States earn approximately 23 percent less income than men but that women are taking steps to manage their finances better than men," said Michele Raneri, VP of analytics at Experian. "The most notable difference is that men are taking bigger individual mortgage loans than women, but it would appear that they are having a slightly more difficult time making those payments on time." Experian found the average mortgage origination amount for men is $187,245, which is 4.9 percent higher than the amount for women. At the same time, 5.7 percent of men are behind on their mortgage payments compared to 5.3 percent of women. Men were also more likely to own a mortgage independently though 72 percent of consumers have joint mortgages. Overall, men own 4.3 percent more debt than women, with average debt at $26,227, according to data from Experian. However, women average a slightly higher credit score of 675, one point higher than men. "Seeing the divide between how men and women approach credit is interesting, but what's most important is understanding the value of building a good credit history. How you manage credit and debt is critical to your financial wellbeing," said Maxine Sweet, Experian VP of public education. "Paying attention to what's in your credit report, never missing a payment, and keeping your utilization rates low are three key steps to financial success." KNOW THIS In 2012, Freddie Mac servicers helped over one million borrowers remain in their homes with a loan modification, refinance, or other home retention option. The GSE reported another 53,000 were able to make an exit through a short sale or deed-in-lieu of foreclosure last year. VISIT US ONLINE @ DSNEWS.COM FORECLOSURES LED TO $192B IN LOST WEALTH IN 2012 Even as the worst of the foreclosure crisis appears to be over, foreclosures led to the loss of $192.6 billion in wealth for Americans in 2012, according to a report from the Alliance for a Just Society, a national coalition of eight state-based grassroots community organizations. On average, the estimated wealth lost last year comes to about $1,700 per household for 114.7 million households in the nation, the coalition says. Its report explored how the foreclosure crisis impacted the country as a whole as well as people of color last year. To illustrate the disproportionate impact of foreclosures on people of color, the coalition noted that in ZIP codes where the majority of the population included people of color, there were 17 foreclosures per thousand households with an average loss of $2,200. In segregated white communities, the group found the rate of foreclosures was much lower, with 10 foreclosures per thousand households and an average loss of $1,300 per household. Even though foreclosure activity has been on the decline, the coalition says there is evidence the crisis is not yet over. Currently, there are millions of borrowers in negative equity positions, with estimates ranging from 9 million to around 13 million. The Congressional Budget Office estimates 13 percent of underwater homeowners are seriously delinquent, which translates into a "foreclosure-in-waiting," according to the coalition's report. As the industry faces the threat of foreclosure from these delinquent, underwater borrowers, the report estimates nearly $221 billion in additional wealth could be lost if no action is taken to prevent them. "America is not only still in the midst of a crisis, but faces the prospect of this crisis stalling an already uneven and uncertain economic recovery," the report stated. The group recommends the use of principal reduction to prevent underwater borrowers from going into foreclosure and to improve the overall economy. "Writing down underwater mortgages to 30-year, fixed-rate loans at current market value and current interest rates would not only preserve much of the wealth that would otherwise be lost by homeowners, their neighbors, and government, but provide a significant economic stimulus by returning wealth," according to the report. By allowing homeowners to spend money on other needs, goods, and services, the coalition asserts local economies will receive an added boost and more jobs will be created. According to the report, 2012 data show a principal reduction program could lead to an average savings of $7,710 per year ($640 a month) for underwater homeowners, pump $101.7 billion into the economy, and create 1.5 million jobs. Although there has been a push for the use of principal reduction on Fannie Mae and Freddie Mac loans, Edward DeMarco, acting director of the Federal Housing Finance Agency— the GSEs' conservator and regulator—opposes the use of principal reduction, arguing it is not in the best interest of taxpayers and creates a moral hazard that could lead to more strategic defaults. 41

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