Autopsy of a Liquidity and Credit Crisis L\'Institut canadien des actuaires Canadian Institute of Actuaries Assemblée annuelle 2008 2008 Annual Meeting Québec. June 19, 2008. The Mechanic of a Global Crisis.
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Autopsy of a Liquidity and Credit CrisisL\'Institut canadien des actuairesCanadian Institute of ActuariesAssemblée annuelle 20082008 Annual MeetingQuébec
June 19, 2008
Number of households 7,2 millions
% ARM with high adjustments 90%
% ARM with 5% adjustments 70%
% approved without sufficient documentation on income 45%
% approved without fiduciary account for taxes 75%
Dollar amount of ARM set for reset in 2006 400 billions
Dollar amount of ARM set for reset in 2007 1,000 billions
Dollar amount of ARM set for reset in 2008 450 billions
Number of foreclosures (Jan-May 2008) 825,000
YoY decline in home prices (May) Nearly 15%
Abolished caps that limited the rates that banks could charge on primary mortgage.
Allowed other mortgages than fixed rate mortgages:
- Balloon-payment mortgage
- IO mortgage
* Siv lite (another 12 billions) had high concentration to RMBS