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December 20, 2007

A subprime primer

Who's getting subprime loans? Not nearly as many as you might think are first-time homebuyers.

Only a third of buyers in the first half of the year who opted for the higher-rate loans -- meant for people with less than perfect credit -- fit that description, according to a survey just released by the Mortgage Bankers Association.

Meanwhile, 64 percent of all new subprime loans were to refinance an existing loan, not to buy a house. That's up from 55 percent during the second half of last year.

Of all new subprime loans, just under 70 percent were adjustable-rate. That might seem worrisomely high, considering that subprime ARMs are a key part of the reason the credit industry is in turmoil and the government is brokering rate-freeze deals, but take heart: It was 75 percent in the second half of last year.

Posted by Jamie Smith Hopkins at 4:52 PM | | Comments (0)

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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
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