Goodbye piggybacks, risky loans

In mid-2007, I began to compile new data on wholesale mortgage interest rates that promised to provide better insights into the market than any existing data source. The rates are those quoted by wholesale lenders, who offer their loan programs through mortgage brokers and mortgage banks. In offering these programs to borrowers, the loan providers add their retail markups, which can vary widely between different programs and different lenders. Wholesale price data thus has less statistical "noise" than retail data.

Recently, I decided it was time to take a hard look at the data to see what they say about the evolution of the financial crisis. The beginning point for the data is May 4, 2007, and the end point is Nov. 7, 2008. The interest rates quoted all assume zero points.

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