Paper Estimates Mortgage Crisis in 2005

Yuliya Demyanyk and Otto Van Hemert estimate the mortgage problems at the end of 2005 (Understanding the Subprime Mortgage Crisis). They find basically that deterioration of mortgage underwriting (higher LTV, ARMs as opposed to fixed income securities, interest-only loans), and find that credit standards deteriorated significantly over the prior 5 years. But I think they really bury the lead, which is that they estimate a doubling of default rates as of the end of 2005 for the next year's new mortgages. Even if I knew that to be true, I would not have anticipated the crisis we observed.