A subprime re-fi.. - forget about it..(ZT)

It seems to me that most (exceeding 75%) of the purchase subprimes will default. Here in Southern CA where prices averaged $500,000 during the boom times the majority of the purchases were 80/20's. Thesewere 0 down loans where ALL the terms are bad. The 1st was at a teaserstart rate which was the ONLY thing good about the loan. The borrowercould choose either 2 or 3 year teaser rate. On the 25th month theywould turn into an ARM with typically 6 1/2 to 7% margin which wasadded to COF Libor rate. The good news is that rates havn't risen much.A regular FNMA "A: paper ARM will have a margin of 2 1/2 to 3% so thisis where they suck big time. The typical borrower wouldn't know amargin if it fell on him. The process in the past was to get some cash out and do the whole stated income shitty loan thing again. Sothe now the brakes are on. Appraised values are not there, 100% loansare not there, stated income is not there. There is literally no whereto go to get a loan. I see most walking away. These were mostlygamblers anyhow who couldn't stand watching house prices go up withoutthem. Another get rich sceme gone bad. This subprime melt down has a long way to go.