To: tejek who wrote (436809 ) 11/26/2008 10:09:41 AM From: Brumar89 Read Replies (2) | Respond to The subprime mortgages of the 21st century were different from the loans made during the Clinton administration. Most of the subprime mortgages of the 21st century had interest rates that reset at the end of one year. Over the last several years, annually adjusting ARMs with an initial fixed-rate period of more than one year, known as hybrid ARMs, have grown in popularity. Within the hybrid category, ARMs with an initial fixed-rate period of five years, known as 5/1 ARMs, have been the dominant choice of consumers. .... The 5/1 hybrid was also the most widely available ARM product , offered at more than 90 percent of lenders canvassed. The net result was that, from September 2001 through October 2003, the average initial rate for a one-year ARM was at or above what would have been its fully-indexed price. With no incentive to take the riskier ARMs, most borrowers found FRMs and other loan products far more attractive. In addition, the continuing advent of low fixed interest rates has largely kept borrowers away from these products, and lenders have shifted their marketing focus to mid-term Hybrid ARMs and very short-term ARMs, leaving the one-year ARM to languish. lenders are once again offering products priced more aggressively than at any time since late 2000. hsh.com ARMs accounted for 17 percent of loan applications in October 2007, according to Freddie Mac's Primary Mortgage Market Survey®, the lowest since June 2003 when fixed-rate loans were near a 45-year low in interest rates and refinance activity was near a peak. Since 1995, the first year that Freddie Mac collected ARM share data, the ARM share has fluctuated between an annual low of 11 percent in 1998 and a high of 33 percent in 2004. " http://www.freddiemac.com/news/archives/rates/2008/20080115_07armsurvey.htmlprices held up until the Fall of 2007 March 9 (Bloomberg) -- Rising mortgage defaults by subprime borrowers may add more than 500,000 homes to a residential real estate market already beset by slumping prices, according to CreditSights Inc. bloomberg.com http://gatewaypundit.blogspot.com/2008/09/bush-called-for-reform-of-fannie-mae.html I am not posting it again because you refuse to learn what this problem is really all about.......instead you continue to listen to the misinformation provided winger pundits and bloggers.
