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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: ild who wrote (192053)9/16/2002 10:09:51 AM
From: reaper  Read Replies (3) of 436258
 
sorry about my flippant response earlier

they seem to have a delinquency problem. and also a greater and greater percentage of their business is coming from sub-prime borrowers, which i imagine people will not like.

check out the default rates on the sub-prime side. 11.11% of 19,500 sub-prime loans were delinquent in June. now its 11.57% of 21,575 loans. so the number of delinquent loans is up over 15%, from 2,166 to 2,496.

i'd also point out the growth rate on the sub-prime side. up 10.6% in only two months. 40% of net new business is sub-prime. yeah, they might now how to price it, but that is dangerous stuff they are playing with.

i am also going to re-iterate my opinion that there should not be a sub-prime lending industry. for MTG to make money in a 12% default environment, sub-prime borrowers have to pay insanely high rates for interest and mortgage insurance. it is ridiculously costly for the 88% of sub-prime borrowers who do make their payments to subsidize those who don't. so much so that the only ones gaining anything out of this whole arrangement are the defaulters and the providers of credit; the sub-prime borrowers who actually DO pay are having what little wealth they have stolen from them.

Cheers
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