CNBC.com / Moody’s

The credit quality of U.S. mortgages is set to weaken substantially through the remainder of 2007 and well into next year, with delinquencies peaking in mid-2008, Moody’s Economy.com said on Thursday.

Delinquencies will peak at 3.6 percent of all mortgage debt outstanding in the summer of 2008, up from 2.9 percent in this year’s first quarter, according to the study.

“This will result in substantial financial damage,” Mark Zandi, chief economist of Moody’s Economy.com, said during a teleconference after the release of the study.

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