(04-20-2012 11:52 PM)UCF08 Wrote:  I've read some studies stating that sub-prime mortgages fared roughly the same as the average mortgage during that period, any truth to that?

It depends on how you define it.

What actually happened was there was a liquidity vacuum. Nobody could finance these highly leveraged positions, particularly in sub prime. The fed came in and supplied liquidity when nobody else would, and then accounting rules were changed so that banks weren't forced to sell assets, or at least mark them to market, when they ceased to be rated the same... And then stopped banks from foreclosing.

From a standpoint of defaults and valuation of the underlying mortgages themselves, there probably wasn't a big difference... Because the government made sure there wasn't.