Mortgage bankers will foreclose on 8.1 million homes over the next four years, representing 16% of all outstanding residential loans in the U.S., according to a new report issued by Credit Suisse.

Back in April, Credit Suisse forecast 6.5 million foreclosures, or 13% of outstanding mortgages. The Wall Street firm says it favors a plan by Treasury to create a 4.5% mortgage using mortgage-backed security issuance but believes the agency "should target an even lower rate in foreclosure hot zones where entire neighborhoods are at risk."

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