Prime loan delinquencies were 2.57%, up from 2.44% in the third quarter, according to the Mortgage Bankers Association.
If a broker puts you into a sub prime loan and you're A credit, they receive what is called the yield spread premium, which also synonymous to a kick back.
Those who entered into sub-prime loan agreements were convinced otherwise, and the resulting cascade of foreclosures did far more to damage the economy than a collective case of cold feet about buying ever could.
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As if to prove their point, the bond ratings agencies noted that delinquencies in the prime loan market had risen, but not by as much and not nearly at the magnitude of the subprime sector.
According to Fannie Mae, the government-sponsored mortgage-lending agency, up to half the people who take out sub-prime loans could qualify for a prime loan, which charges as much as four percentage points less interest, a huge saving over the 30-year life of a mortgage.
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While an increase in prime loan rates will likely impact both interest income as well as interest expense for Wells Fargo, the fact that Wells Fargo derives the majority of its funding from low cost core deposits will help the firm restrain its interest expense even as interest rates increase and thus boost its net interest margins.
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The squeeze on mortgages has led to the entry of "credit crunch", along with the US source of the crisis - the "sub-prime" home loan to those with a poor credit history.
The percentage of auto-loan applications by prime borrowers that were approved rose to 91% in December from 82% a year earlier, said CNW Research.
In the last class are the Van Kampen Senior Loan, Eaton Vance Prime Rate Reserves and Franklin Floating Rate funds.
Others allegedly were steered into costly subprime loans, even though they could have qualified for a prime mortgage, the type of loan offered to borrowers with the best credit histories.
The interest rate of the loan is generally a low rate of prime plus one percent.
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Users of the ReservePlus loan card pay themselves an interest rate pegged at the prime rate (currently 5%) plus a service fee of from 2.9% to 3.25% of the outstanding balance, which goes to Bent's firm.
Agreeing to the loan earlier in the week, the outgoing Italian government of Prime Minister Romano Prodi insisted it was made on commercial grounds.
Prime Minister Dmitry Medvedev said Russia would also "need to draw certain conclusions" before entering more loan talks with Cyprus.
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