The termination of subprime hybrid and fixed rate mortgages
By: by Anthony Pennington-Cross and Giang Ho.
Contributors: Ho, Giang.; Federal Reserve Bank of St. Louis.
Series: Working paper -- 2006-042A; Working paper (Federal Reserve Bank of St. Louis : Online) -- 2006-042A.
Publisher: Federal Reserve Bank of St. Louis
Published: 2006
Place of publication: [St. Louis, Mo.]
Language: eng
Format: Electronic resource
Subjects: Subprime mortgage loans -- United States.
Description: "Adjustable rate and hybrid loans have been a large and important component of subprime lending in the mortgage market.  While maintaining the familiar 30-year term the typical adjustable rate loan in subprime is designed as a hybrid of fixed and adjustable characteristics.  In its most prevalent form, the first two years are typically fixed and the remaining 28 years adjustable.  Perhaps not surprisingly, using a competing risks proportional hazard framework that also accounts for unobserved heterogeneity, hybrid loans are sensitive to rising interest rates and tend to temporarily terminate at much higher rates when the loan transforms into an adjustable rate.  However, these terminations are dominated by prepayments not defaults"--Federal Reserve Bank of St. Louis web site.
Notes: Title from PDF file as viewed on 7/10/2006.

Includes bibliographical references.

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