Submitted by CARPE DIEM

From the Mortgage Bankers Association latest report on Delinquencies and Foreclosures:

“Of significance is that the rate reset issue on adjustable rate mortgages is becoming less of an issue. The 6-month LIBOR rate, the index rate used for many subprime ARMs, has come down around 2.5 percentage points since last September, greatly reducing the payment shock on many ARM resets.”

Actually, since last August when 6-month LIBOR was 5.53%, the latest rate of 2.67% indicates that the reset rate for subprime ARMs has fallen by 2.86% in the last six months (see chart above), which is some rare good news for the subprime mortgage market.

Visit 1800blogger to see all of our industry leading blogs.