For decades, people had continued to pay down mortgages until their last cent was spent. Now, increasing numbers were giving up their homes even as they continued to service other debts. Faced with a plunge in house prices across the US — something that has not happened since the Great Depression of the 1930s — the mortgage industry is already dealing with a surge in the numbers of people defaulting on their payments.
The concern is that the losses on risky subprime mortgages could soon swell further as people with good credit history decide it is not worth continuing to make payments on houses worth less that the loan. House prices in the US are already 20 per cent from the 2006 highs and are forecast to keep falling. For many, especially those who have put little of their own money into a house, sending back the keys could be perfectly rational. The practice has given a name in the industry — “jingle mail” — and there are even companies specializing in helping people with the decision. Youwalkway.com, one such service, almost makes it sound an alluring prospect, “what if you could live payment-free for up to eight months or more and walk away without owing a penny?” the website asks.
Larry Rosenberger, arguably one of the most experienced crunchers of consumer debt statistics around, was meeting the consortium of mortgage lenders to talk about analyzing their data from clues about which people in negative equity could be expected to keep paying down their mortgages. They said, “we’re getting killed with losses, can we figure out more accurately who will do what, so we can be more accommodating with some borrowers but not with others,” Mr. Rosenberger says.
The accuracy of the models used by the likes of Mr. Rosenberger to flag good and bad customers could make a huge difference to the losses that lenders eventually have to absorb — losses that will, in turn, determine the availability of fresh funds for new loans. His approach was to seek clues to people’s future actions in their past behaviors. For example, people with children at local schools may be less likely to walk away than people without school-age children. People with mortgages on second homes may be more likely to give up the investment.
26. Which of the following is NOT true according to Paragraph 1?
27. People stop paying house mortgages because（ ）.
28. The worrying situation in mortgage industry（ ）.
29. What do you think Larry Rosenberger does?
30. What does the underlined word “flag” mean in Paragraph 4?
