- This topic has 4 replies, 3 voices, and was last updated 17 years, 9 months ago by PerryChase.
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December 31, 2006 at 6:42 PM #8127December 31, 2006 at 7:03 PM #42492powaysellerParticipant
I think the most popular ARM in early 2000’s was the 2yr and 3yr ARM; thus the big resets in 2006, more in 2007, and even more in 2008.
Mortgage data is very expensive, so I doubt I’ll be able to afford any of it. Check out this excellent mortgage publication website. Just scroll through the list of articles, :
For just $1797/year, you can subscribe to Inside MBS and ABS and read this article
“Citibank’s Heavy MBS Buy in 3rd Quarter Boosts Thrift Industry’s Mortgage Securities Holdings
Thrift industry MBS investment jumped sharply higher in the third quarter because one of the globe’s largest banking giants parked a huge volume of newly acquired mortgage securities in one of its thrift charters. Citibank (West) FSB, a… [Includes two charts]”“Mortgage Brokers Drive a Sluggish Subprime Market Through 3Q 2006
Mortgage brokers have provided most of the muscle – such as it is – for the subprime market this year, a new snapshot of the business reveals. But brokers are clearly feeling some heat as the year comes to a close because the regulatory spotlight continues…”
to read more, pay Inside B&C Lending, $794/year“OCC: Lenders not Obeying Guide as Expected
Federal regulators are about to get tougher on originators of nontraditional mortgage products for being slow to adopt underwriting practices recommended in federal interagency guidelines issued more than two months ago to protect consumers. Regulators, the Office of…”
to read more, you have to subscribe to Inside Regulatory Strategies for $571/yearFor $50, you can read just one article. How many reporters, other than those backed by Business Week or the Economist, can afford those hefty fees? I bet the U-T isn’t going to let Dean Calbraith spend that kind of money. Would the Voice of San Diego? What is in those articles?
I believe if some bloggers had access to the data, they could paint a doomsday scenario of epic proportions.
December 31, 2006 at 7:22 PM #42494powaysellerParticipant“…a large portion of the sub-prime loans are two-year adjustables, says Berson, the Fannie Mae chief economist.”
$2.5 trillion in adjustable loans is coming due over the next 2 years, according to Paul Kasriel, chief economist at Chicago-based Northern Trust. I think nobody really knows how much will come due. How many of the original borrowers refinanced, so that not all 3yr ARMs made in 2004 will come due in 2007.
“Berson offered a typical example of what the industry calls a “2-28,” an ARM in which the interest rate is fixed for the first two years and then adjusts regularly for the next 28 to whatever index the loan calls for. The average yearly cap on this loan is 2.3 percentage points per year.
Roughly speaking, a consumer’s monthly bill could rise from $330 to as much as $1,425 to $1,755.
Fannie Mae expects sub-prime loans to be reset en masse this year with that trend continuing into 2007.
But over at the Mortgage Bankers Association, senior economist Michael Fratantoni is more interested in the five-year adjustables that were issued during the refi craze of 2002-03. That’s a large crop that will sprout in 2007.
“The estimate is that in 2007, more than a trillion dollars worth of hybrids are going to hit their first reset date,” he said.
That one chunk of hybrid loans represents 12 percent of the $8.8 trillion in single-family home loans outstanding nationwide.” – Mish’s Site, from the HeraldTribune
We are reminded in the article that cheap and easy credit is not a given. People think they can always refinance, but when credit cycles contract, that is not the case.
December 31, 2006 at 7:46 PM #42495TheBreezeParticipantThanks for the extra data points, Poway. Your posts always contain excellent info.
January 1, 2007 at 5:29 PM #42515PerryChaseParticipantThanks for the link to the article. I get the magazine but don’t have time to read everything.
The article makes me think of how China’s banking system is in bad shape and may not survive economic shock because they never developed a good risk/credit management system. In America we have a good credit reporting system but the lenders threw that out the window and lent money willy nilly to boost origination fees/income. By the time the FBs default the mortgage executives would have pocketed their bonuses and been long gone.
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