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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: loantech who wrote (24887)	1/18/2005 5:44:33 PM
From: russwinter	Read Replies (1) \| Respond to of 110194

Ok, take 50 bps off the Libor numbers I provided. Message 20959114 That actually increases monthly payments even more percentage wise, as last Feb. the rate would be set after margin at 3.61%. 5.5% on a 250k mortgage would be $1,420/mo, vs $1136 at 3.6%. Quite an economic depressive multiplied by hundred of thousands if not millions of loans. I'm SWAGing that about 2% (because of the Jan-May concentration of activity) of all mortgages get reset each month through May, then it slows up a little. Still with the Libor at 3.10%+2.25= 5.35% at the Dec. 31th reset, and now 3.25% (today)+ 2.25%= 5.50%, I can't see how lenders can make 4.75% 3 year ARMs loans without being well paid up front on points, fees, and still make it a teaser?

To: loantech who wrote (24887)	1/18/2005 5:50:15 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

Margins are usually 2.75 on the treasury ARMs and 2.25 on the libors. I would say most are done on the libor index. I would say from my small window of exposure that we do mostly libor ARMS. On that basis it appears my 2.25% guess was reasonably accurate. Perhaps a range of 1.875-2.50 with the bulk at 2.25? I might guess that sub-primes and marginals are higher. Is that correct? What % of loans is tied to 1 month libor, vs 1 yr libor, vs 3 yr libor? When the 1 and 3 yr lockup period ends, what does the libor go to? Mish