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Thursday, April 12, 2007

Fannie Mae on 2007 ARM Resets

by Tanta on 4/12/2007 12:39:00 PM

Fannie Mae's newest Economic and Mortgage Market Developments report (thanks, Lurker!) has some interesting charts on projected ARM resets for 2007.

First, which ARMs are we talking about? Subprime and Alt-A appear to be the clear winners on volume.

Second, how have borrowers in recent vintages responded to imminent rate resets? By refinancing, of course.

Finally, how eligible for refinance are those subprime loans that will reset this year? I suggest that we carefully ponder this third chart.

If you are like me, you might be wondering how that big chunk of loans with a FICO over 700 and a CLTV of 80% or less found its way into a subprime security.