(Reuters) - "Based on deal characteristics we will be increasing our
post-reset default rates by as much as 150 percent depending on
collateral characteristics," Glenn Costello, co-head of Fitch's
residential mortgage group, said on a conference call.
So-called 2/28 loans that have fixed rates for two years
and are adjustable thereafter make up the bulk of the subprime
mortgage market. Interest rates on many subprime loans can
surge by 6 percentage points or more on the reset date,
creating a "payment shock" that many analysts expect to worsen
already high delinquency rates.
Read more at Reuters.com Bonds News
post-reset default rates by as much as 150 percent depending on
collateral characteristics," Glenn Costello, co-head of Fitch's
residential mortgage group, said on a conference call.
So-called 2/28 loans that have fixed rates for two years
and are adjustable thereafter make up the bulk of the subprime
mortgage market. Interest rates on many subprime loans can
surge by 6 percentage points or more on the reset date,
creating a "payment shock" that many analysts expect to worsen
already high delinquency rates.
Read more at Reuters.com Bonds News
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