Risky Mortgage Bonds Return as Delinquencies Pile Up

The video discusses non-qualified mortgages, which are loans given to borrowers with less than perfect financial records, such as freelancers or those with past bankruptcies. Despite higher default rates, investors are optimistic due to a strong housing market. The video also compares these mortgages to subprime loans from 2006-2007, noting differences in borrower credit scores and market conditions.

What is a characteristic of non-qualified mortgage borrowers?

• They are always employed by large corporations.

• They may have prior bankruptcies or irregular income.

• They are typically first-time homebuyers.

• They have perfect financial records.

Why are investors currently optimistic about non-qualified mortgages?

• Interest rates are at an all-time high.

• The housing market is strong despite higher default rates.

• The default rate is extremely low.

• The housing market is weak.

What is a reason for the rising issuance of bonds related to non-qualified mortgages?

• There is a decrease in housing demand.

• The housing market is perceived as strong.

• Interest rates are increasing rapidly.

• Investors are avoiding these bonds.

How do non-qualified mortgage borrowers differ from subprime borrowers?

• They have lower credit scores.

• They are primarily investors.

• They have higher credit scores, typically in the low 700s.

• They have no credit history.

What distinguishes the current mortgage market from the 2006-2007 subprime crisis?

• Current borrowers have better credit scores.

• Current borrowers have no credit history.

• The housing market is weaker now.

• Interest rates are higher now than in 2006-2007.