Rosengren, Eric

To better understand the subprime issue, the Federal Reserve Bank of Boston has been studying publicly-available information from the Registries of Deeds in New England states, which allows us to study the patterns of mortgages issued on a given house over time. ... A first finding is that recent foreclosures have been disproportionately related to multi-family dwellings... This highlights a potentially serious problem for tenants, who may not have known that the owner might be in a precarious financial position. Second, the Banks research shows that the duration of a subprime mortgages is on average quite short for a sample of subprime mortgages used to purchase a home between 1999 and 2004, two-thirds have prepaid within two years and almost 90 percent have prepaid within three years. Prepayment will occur if the home is refinanced or if it is sold. While some of those sales may have been under difficult circumstances, it is plausible that many borrowers who purchased homes with subprime products did benefit from the appreciation of home prices in New England that occurred over the last decade.