Richard Green is a professor in the Sol Price School of Public Policy and the Marshall School of Business at the University of Southern California. This blog will feature commentary on the current state of housing, commercial real estate, mortgage finance, and urban development around the world. It may also at times have ruminations about graduate business education.
Tuesday, October 14, 2008
Capital and Prime Mortgages
At this morning's panel, I commented that I had been mistaken in thinking that 2.5 percent was a sufficient capital cushion for prime mortgages. One of the panelists, Don Ankeny, wisely noted that Fannie-Freddie's troubles did not arise from prime mortgages, but from Alt-A loans. So for true prime mortgages, 2.5 percent may indeed be enough.
Mortgages are a stressful topic right now. It's good to have as much information as possible.
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