From Bloomberg, MHProNews.com finds that mortgage defaults are on the rise in Canada. Canada Mortgage & Housing Corp. (CMHC) defaults have soared nine-fold in 20 years, the business paper says, approaching levels reached by Fannie Mae and Freddie Mac in the U.S. at the height of the housing boom. Bloomberg estimates that in 2006 at the peak of the U.S. housing market, the combined exposure of the government-backed agencies to potential defaults was slightly more than a third the size of the economy. The calculations are based on U.S. Federal Reserve data. John Andrew, real-estate professor at Queen’s University in Kingston, Ontario told reporters the risks are significant. According to the median of a Bloomberg survey of 13 economists, there’s a 15 percent chance housing prices will decline 10 percent or more over the next year. CMHC suggested in a Feb. 13 report the average price of existing homes will climb 2.7 percent in 2013.
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