Lose the Car, Keep Your House?
Attention lenders: pedestrians are better risks!
A new study of mortgage defaults in three cities concludes that people who live in areas where they don't need a car are less likely to default on their mortgages than people who live in suburban sprawl. In fact, the likelihood of default went up with the number of cars a household owned.
The study, released today by the Natural Resources Defense Council, suggests that mortgage lenders might consider where someone lives when pricing a loan. The logic: if your car isn't sucking up cash, you have more to pay your mortgage debt.