A new subprime product totally different from anything seen before will be created within six months, according to a panelist at the SourceMedia Nonprime Lending Symposium in Las Vegas.Tom Zimmerman, managing director and head of asset-backed securities research at UBS, said the industry needs to create a subprime product "that makes sense," noting that some think a product like the 2/28 adjustable-rate mortgage is not appropriate for people who already have problems making payments. Mr. Zimmerman also noted that we have gone from an era when early payment defaults were "unusual and unexpected" and less than 1% to a point where 6%-10% of all loans in packages are being put back for EPDs.

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