This guy in this SeekingAlpha piece is annoyed by all the sub-prime hoopla.

For two years all we have heard is “housing must slow down” and “there are too many risky loans out there.” Now that the housing market has slowed down and the home buyers with those risky (subprime) loans did exactly what we knew they would do, default, this is suddenly a big deal?

Very entertaining. But there’s numbers too!

This is not really the big deal it is being made out to be. Some numbers:

• Approximately 80% of the mortgage market as “A” credit.

• For “A” paper, the delinquency rate is in a comfortable 2.5% range.

20% of the market as “subprime” of all types and terms.

• Of the 20% slice, the Mortgage Bankers Association reported this week that some 13% of those loans were in some stage of delinquency, a number which has steadily risen over recent quarters.

• While alarming, the flip side is that some 87% of subprime loans are performing fine.

• Only 6% of homeowners hold subprime ARMs (adjustable rate).

• Even if we hit a 20% default rate among subprime ARM holders — a rate twice as high as the foreclosure peak after the 2001 recession, that is only about 1% of the national mortgage market.

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