That sinking feeling

As property prices continue to drop, so loan-to-value ratios rise and more loans are dragged underwater. Barclays Capital's Ajay Rajadhyaksha asks what this means for the market

I woke up some days ago to a curious, unsolicited email. It urged me to "walk away" from my mortgage. This tactic, the email insisted, would let me stay for free in my house for several months, through the process of foreclosure. Despite the prevalence of such emails, however, fears of 'good' borrowers walking away are, I believe, exaggerated, at least for now. But there is no denying the influence of falling home prices on a borrower's tendency to default.

A borrower who is financially stretched

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