Interest rates aren't the problem


	Interest rates aren't the problem

Victoria Barret

3-28-2008 2:46 PM

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tags:

interest rates, economy, mortgages

Victoria Barret says:

Bernanke's cuts have eased the scheduled increases on sub primes with "teaser rates". If these borrows can't afford there homes now, they couldn't afford to buy them in the first place.

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://www.clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/8bac338f-4afc-4602-8657-5b0c52f4ef3a/D69449FB-6CE8-4D4E-AC42-713E027BA4AD/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://www.bloomberg.com/apps/news?pid=20601039&sid=ajRTMlVVsvVY&refer=home" href="http://www.bloomberg.com/apps/news?pid=20601039&sid=ajRTMlVVsvVY&refer=home" style="font-size: 11px;">www.bloomberg.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.bloomberg.com/apps/news?pid=20601039&sid=ajRTMlVVsvVY&refer=home"><P>Much of the discussion about the danger of resets has
focused on the initial interest rate, or ``teaser rate,'' that
ARMs carried. That left the impression it was a very low rate
that would adjust up a lot. Most of the initial rates were 8.5
percent or above, and now many are set to adjust hardly at all.     </P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.bloomberg.com/apps/news?pid=20601039&sid=ajRTMlVVsvVY&refer=home"><P>A new <A target="_blank" href="http://www.newyorkfed.org/research/staff_reports/sr318.pdf">report</A>, ``Understanding the Securitization of
Subprime Mortgage Credit,'' by economists <A href="http://search.bloomberg.com/search?q=Adam+B.+Ashcraft&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1">Adam B. Ashcraft</A> and
<A href="http://search.bloomberg.com/search?q=Til+Schuermann&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1">Til Schuermann</A> of the New York Federal Reserve Bank, published
this month, provides a wealth of detail about subprime
mortgages. Much of its information is based on a pool of such
mortgage-backed securities issued by New Century Financial in
June 2006.     </P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.bloomberg.com/apps/news?pid=20601039&sid=ajRTMlVVsvVY&refer=home"><P>Now, if six-month Libor remains close to its recent level
of about 2.6 percent, the June reset would be less than a
quarter-percentage point. If the Fed's lending rate target is
lowered again, as many investors expect, the loans' interest
rate might dip a couple of basis points to the floor of 8.62
percent.     </P></blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/D69449FB-6CE8-4D4E-AC42-713E027BA4AD/blog/" title="blog or email this clip"><img src="http://content7.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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