Just about 20% of the sub-prime mortgages granted in 2006 and that are at least fifteen months old are delinquent. The CMO - collateralized mortgage obligations - boosters say things got out of control in 2006. Well, the boosters may not be right. It seems that about 19% of the sub-prime mortgages granted in 2005 that are at least twenty-six months old are delinquent.
And, this week Caliber Global Investments, a London investment fund, closed its doors because of the performance of the CMOs they bought, much of which represented sub-prime loans granted in 2005.
Finally, what will happen when the higher rates kick in on all those adjustable rate mortgages out there?
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