In an interview given to The Wall Street Journal, U.S Treasury Secretary Henry Pauylson observed that the number of home-loan defaulters in the U.S could possibly go up in the year 2008. He observered that the number of defaulters might rise next year than it was in 2007, because “2006 mortgages had lower underwriting standards, no amortization and no down payments” Paulson was trying to help the Industry by making a large section of borrowers eligible for better loans instead of tackling individual cases. Now it is believed that Paulsons comments could have been the reason for the dollar to fall a two year low against the yen on Wednesday!
U.S is trying hard to tackle its home-loan mortgage which has become a case of major concern to the economy.
Source: Reuters, WSJ