Posted by CJ on 1/21/08 7:57pm
Msg #231704

Subprime Interest adjusting question.

I admit I am ignorant. I know that the subprimes adjust according an interest index, but I never really paid attention to which one.

Which index causes the subprimes to up or down?

Thanks. Just curious.

Reply by LKT/CA on 1/21/08 8:00pm
Msg #231705

Check out www.mortgage-x.com

Reply by Lisa Prestegard on 1/21/08 8:03pm
Msg #231706

LIBOR is the most common of benchmark indices

Reply by Becca_FL on 1/21/08 8:07pm
Msg #231707

Libor (London Interbank Offered Rates) and MTA (Monthly Treasury Average) are the two biggies.

How is it that you have been closing loans for so long, but don't know this?

Reply by MichiganAl on 1/22/08 12:09am
Msg #231733

"I know that subprimes adjust according an interest index"

You really don't know that. Just because a loan is a subprime, doesn't mean it's adjustable. It can be a subprime loan and still be a fixed rate. What you're really asking is what index is typically used on adjustable rate loans.

"I never really paid attention."

The index is on the front page of the note, one of the most important documents in the package. I personally think it's vital for us to show the borrower how their rate can adjust and I couldn't imagine doing a single signing without knowing how to read a note and where to find the index.