The Coming Alt-A Mortgage Apocalypse

According to the Scotsman Guide, the Alt-A mortgage is primarily a credit-score driven product, as its borrowers don’t have proof of income from traditional employment. The Alt-A loan alleviates the challenges associated with due diligence, such as providing income verification and documentation of assets. On the flip side, for this convenience, borrowers do pay a slightly higher interest rate, usually from a quarter- to half-point higher than traditional, fully documented loans.

It turns out that Alt-A loans are headed for a crash that may be bigger and badder than the sub-prime problem we’re seeing now.

This video lays our what we could be facing:

http://www.youtube.com/watch?v=pmeBSWI9sF8

A big thank you to a good friend of mine – Brian Kurtz at http://www.banknegotiator.com/ for sending me the link.

Hate to say it again, but it looks like it’s going to get a lot worse before it gets better.

 

 

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