I am afraid this may just signal the death of the subprime market, as we know it.
Wells Fargo & Co., Countrywide Financial Corp., Washington Mutual Inc., First Franklin, and Option One Mortgage will stop originating 2/28 adjustable-rate loans (2/28 ARM). This loan type accounted for 65 percent of all sub-prime mortgages last year. The FEDs have been applying a great deal of pressure on these lenders to underwrite loans at the fully indexed rate.
I hate to be the bearer of bad news, but I would want to know of a change like this as soon as possible.