Upside Down Mortgage

Percentage Of Mortgages Subprime

Question: What percentage of suprime mortages actually defaulted?

Hey you know from the 2007 subprime mortgage crisis alot of those mortage holders defaulted... im just curious approximately what percentage of those loans defaulted? Also, what percentage of dollar value of loans do the defaulted loans constitute? 20%?

Moreover, what percentage of defaults can banks handle without problems? no more than 5%?

Answer: Bank of America bought Merrill Lynch's subprime loans for 22¢ on the dollar. If only 75% of subprime borrowers defaulted , BofA would still make a profit. But it now looks like they will lose money on the deal. So over 78% of Merrill's loans went bad.
For the entire industry it is less than that. Merrill jumped in late and made the worst loans. But i think that 50% of the subprimes went to foreclosure.
Banks did not keep perfect divisions on their loans. So we can only guess when we use the word "subprime". And 20% of all subprime loans were issued to people who actually would have qualified for a prime loan but were steered to a subprime because that loan generated more profits for the lender.
No one knows the answer to your last question but it is over 5%..

Poll: Americans Oppose Sub-Prime Mortgage Bailout

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