Alt-A and ARM resets could trigger another crisis!!!
We are winding down out of subprime and going into Alt-A and ARM resets. We have government funding for homes in two ways. One, incentives with lower rates and tax credits, but, there is more. The GSE’s are allowing loans that are 105% and where the monthly debt to income is over 60%. These loans have high default rates and we will pay the price as unemployment stays high. quote Let’s look at a few facts: The Fed is literally the entire mortgage market. Yes, really. [more...]
Date: 2009-09-29 18:15:58
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Subprime Containment Theory Was a Lie
Conventional wisdom (or market spin) was that the risk of default from subprime would not spill over into Alt-A and Prime loans ... was the negative amortization loan. The loan balance can grow each month as the deferred interest is added ... they have not been widely exposed to these loan types. An adjustable rate mortgage resets to a different [more...]
Date: 2009-01-14 03:59:54
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