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Speeches & Testimony
Tables and Charts Accompanying the Testimony of Sandra L. Thompson
Federal Deposit Insurance Corporation
September 20, 2006
In order of reference
 d
Table 1. Combining Higher-Risk Loan Features Results in "Risk Layering"
and Heightens the Overall Level of Credit Risk
| Recent Collateral Trends in Lending for Interest-Only and Pay-Option Adjustable Rate Mortgages
|
| Year |
Low or No
Documentation
(a) |
Loan to
Value
(b) |
Credit
Score
(b) |
Investor
Share (c) |
Prepayment
Penalty (a) |
| 2003 |
53.9% |
76.0 |
701 |
11.6% |
50.5% |
| 2004 |
58.0% |
77.1 |
692 |
12.6% |
51.9% |
| 2005 |
65.7% |
76.4 |
696 |
14.1% |
59.2% |
(a) Calculated as a percentage of total interest-only or pay-option adjustable-rate mortgage originations.
(b) Original combined loans to value and credit scores are weighted averages.
(c) Calculated as nonowner and second home originations.
Source: LoanPerformance Corporation (Alt-A and B&C mortgage securities database).
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