Comments on: of the total trillions worth mortgage loans in the US, what percent are subprime loans? ? http://www.mortgage--loans--blog.com/uncategorized/of-the-total-trillions-worth-mortgage-loans-in-the-us-what-percent-are-subprime-loans A blog on mortgage loans Tue, 22 May 2012 04:38:27 +0000 http://wordpress.org/?v=2.7 hourly 1 By: Ed Atun http://www.mortgage--loans--blog.com/uncategorized/of-the-total-trillions-worth-mortgage-loans-in-the-us-what-percent-are-subprime-loans/comment-page-1#comment-199 Ed Atun Tue, 18 Nov 2008 19:03:32 +0000 http://mortgage--loans--blog.com/renting-real-estate/of-the-total-trillions-worth-mortgage-loans-in-the-us-what-percent-are-subprime-loans/#comment-199 If you include the "no documentation" loans, the total is 35% of all outstanding loans. The no-doc loans are called Alt-A loans but they are mostly subprime because the buyers would never have been approved under normal underwriting standards.. If you include the “no documentation” loans, the total is 35% of all outstanding loans. The no-doc loans are called Alt-A loans but they are mostly subprime because the buyers would never have been approved under normal underwriting standards..

]]> By: liberal_60 http://www.mortgage--loans--blog.com/uncategorized/of-the-total-trillions-worth-mortgage-loans-in-the-us-what-percent-are-subprime-loans/comment-page-1#comment-198 liberal_60 Sun, 16 Nov 2008 20:14:18 +0000 http://mortgage--loans--blog.com/renting-real-estate/of-the-total-trillions-worth-mortgage-loans-in-the-us-what-percent-are-subprime-loans/#comment-198 The loans are packaged into groups and sold to various companies - such as AIG; and a) Many companies are highly leveraged, so the effect of a higher than predicted rate of defaults has a magnified effect, and b) some loan packages are written so that the buyer of the package is exposed to a higher percentage of sub-prime loans (which translates to a higher default rate and a higher interest rate) than the overall average- so their risk exposure is much higher than the overall average. BTW Obviously not all sub-prime loans are in default(non-performing), so you are not quite asking the right question. Also I don't think your 95% guess is close to accurate. But I don't have real numbers handy. edit. Your question made me curious, so I looked up the default rates and foreclosure rates for subprime US mortgage loans. The most recent rates I could find are for 2006. I have no doubt that current default and forclosure rates are much higher. 12.7% default rate 2006 4.5% foreclosure rate 2006 additional edit: Wall Street Journal weekend edition for Sept.20 reports that the current default rate for sub-prime loans is 25%. The loans are packaged into groups and sold to various companies - such as AIG; and a) Many companies are highly leveraged, so the effect of a higher than predicted rate of defaults has a magnified effect, and b) some loan packages are written so that the buyer of the package is exposed to a higher percentage of sub-prime loans (which translates to a higher default rate and a higher interest rate) than the overall average- so their risk exposure is much higher than the overall average.

BTW Obviously not all sub-prime loans are in default(non-performing), so you are not quite asking the right question. Also I don’t think your 95% guess is close to accurate. But I don’t have real numbers handy.

edit.
Your question made me curious, so I looked up the default rates and foreclosure rates for subprime US mortgage loans. The most recent rates I could find are for 2006. I have no doubt that current default and forclosure rates are much higher.
12.7% default rate 2006
4.5% foreclosure rate 2006

additional edit:
Wall Street Journal weekend edition for Sept.20 reports that the current default rate for sub-prime loans is 25%.

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