More than $47 billion of prime and Alt-A mortgages are due to recast from interest only payments to fully amortizing payments over the next 12 months, Fitch Ratings reports.
This recast exposes borrowers to an average payment increase of 15 percent and possibly higher if interest rates increase.
During the next two years, a total of $80 billion of prime and Alt-A loans, and a total of $50 billion subprime loans, are due to recast.
This payment shock will have a substantial effect on the recasting
population, according to Managing Director Roelof Slump. (more)
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