C.D. Davies discusses the difference between subprime home loans and Alt A mortgage financing.
The video talks about home mortgage industry and how mortgage lenders made bad subprime loans to risky borrowers that could not afford the mortgage payment as soon as it adjusted. Alt-A home loans were not much better because many of these loans were stated income with no income documentation required. Who could forget the ridiculous 1% teaser rate on loans that had negative amortization features that actually caused mortgage balance to rise. Many of the foreclosures came from the no-money down home loans made from Alt-A and subprime lenders.
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