Obviously, it is an extremely small number. It is 76 ten-thousandths of 1 percent, that’s tiny! It is also represents the percentage of sub-prime loans compared to all outstanding loans in the United States. It is time for some perspective!
There are currently $9.9 trillion dollars in mortgage loans in the United States. Of that $9.9 trillion, there is only $75 billion in sub-prime loans or .0076%. Is this .0076% really worth all of the negative attention the media is giving it? Absolutely not!
Why is the media giving the sub-prime “melt down” so much publicity? Obviously, the numbers above are probably a bit staggering to you compared to what the media is telling us. The true reason the media is harping on the sub-prime sector is that many Fortune 100 and 500 Companies have purchased financial products as assets that have sub-prime loans within the product. In years past, there has been a large rate of return on these products. However, these companies now have to write off some of the profits they have received and that is why the media is having a field day. What about the hundreds of billions of dollars they have made on sub prime loans over the last 6 years?
The market is great and I think these numbers will put into perspective the skewed representation from the media that the industry is receiving. Rates are great and this is the perfect time to buy up!!!
Other numbers to keep in mind:
99.9924% is the percentage of home loans that are NOT sub-prime loans
97.4% of all mortgages are current and being paid on time
6.9% is the average yearly rate of appreciation of homes since 1952
30% of all homes in the United States are paid off
This information was given to me by Steve Fisher of Century 21 Beachside real estate in charleston South Carolina
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