Quite interesting from a long term investor's perspective
as opposed to chicken little's.
Buffett buys subprime mortgages, freezes resets - MarketWatch
Buffett buys subprime mortgages, freezes resets
By Alistair Barr, MarketWatch
Last update: 4:32 p.m. EDT May 4, 2008
OMAHA, Neb. (MarketWatch) -- Berkshire Hathaway has bought portfolios of subprime mortgages and has frozen resets that were due to send the interest rate on those home loans higher, Chairman Warren Buffett said on Sunday.
Clayton Homes, which makes and provides financing on manufactured homes, purchased these subprime mortgages and sent letters out to all the borrowers involved telling them the interest rates will not be reset higher, Buffett explained.
That's even though the contracts allow Clayton to increase the interest rates on these loans, the rates won't change, he added.
"We're not in the business of resetting mortgages higher," Buffett said. Clayton is a unit of Berkshire (BRKA:
End of Story
Alistair Barr is a reporter for MarketWatch in San Francisco.