DISQUS

Blown Mortgage: Subprime loan performance stabilizes

  • John Wheaton · 1 year ago
    It's likely that existing Sub Prime 2/28 loan rates have adjusted based on the considerably lower T-Bill or Prime, or slightly lower LIBOR indexes. What closed 2 years ago at 7 percent has adjusted to 5% which was the Feds intention all along.
  • DK · 1 year ago
    Isn't this the lull before the storm? I understand that a large wave of resets will occur during the summer resulting in a wave of "nonperformance" 3 to 6 months later..........I am so glad I sold ALL my bank stocks.
  • DK · 1 year ago
    Lets see, all those subprime 2/28 and 3/27's were tied to libor. So libor at around 3 plus a margin of 6 to 7% (standard subprime margins) equals 9 to 10% amortizing on the reset. That is an increase in payment from the 5 to 7% rates they started from. With the house values dropping from 100% LTV's manyof thhese loans are "underwater" so an INCREASING payment is not a good thing. Also, the second mortgage (20%) was probably a 15 year fixed......pretty expensive to start.
  • morganb · 1 year ago
    right - the margin's on these assure that regardless of what libor is
    at (excepting zero) the rate is going to be a couple of points higher
    than the teaser rate.
  • P. Jackson · 1 year ago
    Just b/c I take such joy in beating the major press to a story -- by a long shot:
    http://www.housingwire.com/2008/04/24/in-batter...

    I'm one of the few that gets the remittance summaries the day after they come out. :)