As home mortgages continue to default, which one is at a higher rate now, adjustable or sub-prime loans?
I need to know for my current events worksheet in government… this is not something I am very well informed about.
Tags: Continue, default, Government, higher, home, Loans, Mortgages, Rate, Subprime
and the point of going to school and doing research is what?
That you get better informed about things like this.
Google it and sit down and read all the articles you find then compile what you have learned and fill out your current events worksheet.
Open these links.. the first one has a graph you can use for this project:
http://paul.kedrosky.com/archives/2009/02/10/next_wave_of_us.html
http://www.moneyweek.com/news-and-charts/economics/the-truth-about-us-mortgage-default-rates.aspx
http://bigpicture.typepad.com/writing/2009/07/mortgage-default-crisis—brutal-past-2-months.html
Addy, I’m not sure if I understand your question.
If you are asking which has higher interest rates – adjustable loans or subprime loans – there are no more subprime mortgages. The mortgage crisis shut down these types of loans. In addition, a subprime loan can have an adjustable rate, so there would be some overlap in the 2 categories. In fact, most of the old subprime loans did/do have adjustable rates (ARMs).
If instead you asking which group of loans have higher default rates – adjustable or subprime – well, subprime loans definitely have higher default rates. You may want to do a Google search on that. You’ll get many sources of valid data and information.
Overall, subprime loans are named such because we know they are sub-quality and will have a higher default rate. But many adjustable rate mortgages are conventional, prime loans with a small likelihood of default.
Good luck.
Most sub prime loans have defaulted and I’d say adjustable ones have too. What we’re seeing now are those who are under water or upside down in the loan and can not refinance. We are still a few years away from being done with this. Next are those who just walk away because they are upside down.