Fremont I&L's early defaults climbed to 6% last year
Tuesday, January 30, 2007
Inman News
A subprime lender that was
experiencing an early default rate of nearly 6 percent last summer has stopped
doing business with 8,000 mortgage brokers who were "highly
correlated" to the sudden rise in defaults.
Fremont Investment and Loan has
reduced its early default rate to 3 percent since severing its ties to the
brokers, Fremont vice president of marketing Mike Koch told a group of
investors Monday, Reuters reported.
Some of the brokers may have done
nothing wrong, but specialized in 80-20 loans that Fremont cut back on, Koch
said. But Koch said other brokers were "pushing appraisals," the
story said.
Fremont had
the highest rate of defaults on subprime loans made in 2006, according to an
analysis by UBS Investment Bank.
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