Yeah, I’m wondering what percentage of the 50%+ of all buyers “prime” borrowers got the higher risk payment option, interest only, etc ARMs or a long teaser ARM and run the heighten risk of default.
If the majority got the risky ARMs and default at 1/10th the rate of the subprime borrowers, we’re looking at 1 in 15 of all buyers in the last two years ending in foreclosure. If the rate is half the default rate of subprime, that rises to 1 in 10.
During the bottom of the last cycle, the foreclosure rate peaked at about 1% (1 in 100).
With roughly 100,000 homes sold in the last two years, that puts roughly 5% of current monthly volume up for foreclosure every month for the next four years.
