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July 20, 2007
Subprime Staple Is Phased Out
Subprime adjustable-rate mortgages with low fixed rates during the first years and a variable rate sometimes above 10 percent for the remainder of the loan term have been discontinued by Countrywide Financial Corp., Option One Mortgage Corp. and First Franklin Financial. Higher default rates on these so-called 2/28 loans have made it more difficult for lenders to sell them as securities on the secondary market.
Posted by S. Germain at July 20, 2007 11:08 AM