After a year of defaulting on its loan payments, Puerto Rico declared bankruptcy in May, the largest municipal bankruptcy in U.S. history.
Since then, Argentina has had to overcome severe currency devaluation, a closed economy, and fourteen years of default that ultimately resulted in a $4.65B payment to US hedge funds.
Schools lose eligibility for federal funds if they have three consecutive years of default rates exceeding 25percentthethresholdhold will be 30percentt under the new three-year default window).
Moody's has a similarly poor track record, having deemed 11 out of 13 countries a B or higher within a year of their default.
After more than a year of rising defaults and inexorable house-price declines, such relief is as central as direct aid to stabilizing the banks.
According to JPMorgan's calculations, the credit-default swaps market implies around a 15 percent probability in any year of a Spanish default for the next five years.
Although the numbers of reverse mortgages have declined in recent years, the rate of default is at a record high — roughly 9.4 percent of loans, according to the consumer protection bureau, up from around 2 percent a decade earlier.
Correction: December 28 , 2001 Friday Because of an editing error, an article on Monday about Argentina's default on its $132 billion debt, which is not considered an imminent threat to other countries' economies, misstated the year of Russia's default on part of its debt, which harmed many developing countries.
Homeowners with good credit are falling behind on their payments in growing numbers, even as the problems with mortgages made to people with weak, or subprime, credit are showing their first, tentative signs of leveling off after two years of spiraling defaults.
