Thursday, July 19, 2007
Flashback from April 2007
A number of observers – including this blog – have been arguing that the mortgage problems are not a niche issue involving only sub-prime mortgage as many near-prime (Alt-A, etc) and prime mortgages have the same reckless features (low or zero down payment, low or no documentation of income and assets, interest rate only, negative amortization, option/hybrid ARMs) of the sub-prime ones. We have now some first hard evidence that the trouble in near-prime Alt-A loans (typically low/no doc mortgages) is now emerging. As reported by the press, M&B Bank is now showing trouble both in its sub-prime and Alt-A loans.