And when that interest rate readjusts upward - we're talking specifically about somebody who was in the subprime mortgage that was also in adjustable rate mortgage, meaning that it was typically a very low rate for a year or so, maybe three years, and then it would readjust upward once rates changed in a couple of years.
This would reduce the reset rates adjustable-rate subprime mortgage holders would have to pay.
Prior to that there was its run-in with U.S. federal agents in a tax evasion scheme, its subprime mortgage writedowns and auction rate securities litigation.
The Swiss bank is working to repair its reputation which has been hurt by trading scandals, tax evasion schemes, subprime mortgage writedowns and auction rate securities litigation.
Since then, about 1 in 4 of the nearly 200 plaintiffs has declared bankruptcy, about the same rate as subprime mortgage default.
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The Mortgage Bankers Association reports the number of subprime adjustable rate mortgages at 2.9 million.
The subprime mortgage mess and ensuing financial markets collapse led to economic growth rate plummeting and high unemployment levels that led to a steep decline in disposable income levels.
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The default rate for CAP borrowers was only a quarter what it was for subprime mortgage holders, even though the incomes and backgrounds of borrowers were similar.
In a famous 2006 presentation at a conference hosted by Grant's Interest Rate Observer, he explained in painstaking detail the flaws in subprime-mortgage securitizations, and in the high grades awarded to them by government-anointed credit-rating agencies.
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The Federal Reserve, lagging other central banks, pumped in extra money and then cut its discount rate to prevent a seizure of the financial system in the aftermath of the subprime mortgage market debacle.
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