Profile picture for Aldreth

Good thing its contained to subprime.. er wait

http://www.reuters.com/article/marketsNews/idUKWNA548720071119?rpc=44

Moody's cuts 23 JP Morgan Alt-A RMBS classes

"The ratings were downgraded and placed under review for
downgrade based on higher than anticipated rates of
delinquency, foreclosure, and REO in the underlying collateral
relative to credit enhancement levels," said Moody's.
  • November 19 2007 - US
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Answers (7)

"credit enhancement". I think those words clearly tell the story.
  • November 19 2007
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Profile picture for A.C.
  • A.C.
  • 13 contributions
It floored me when looking on the internet "50 year with 10 year interest only" type loans. Obviously I hadn't kept up with what was going on out there, it used to be package A, B or C straight up anyone can read and understand closing docs.

I wondered how long it would take for the "top" mortgage lenders to finally say they screwed up and get back to loan A, B or C which is a minor vairation of what was offered to my parents growing up yet still managable. I think they call that a "market correction" - but I could be wrong.
  • November 19 2007
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They were lending at 3.5x salary. They did their 'credit enhancement' stuff and went to 7x salary. Do the math. With property taxes it almost equals your whole check.

Did you notice the 'reverse mortgage' for the elderly? They'll pay you monthly to eat up your equity and they'll do it with a smile. :-)
  • November 19 2007
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Profile picture for BuyEqualsRent
"Subprime" is just the shorthand the media uses. Most of the alt-a and option loans were to prime borrowers. But having a high FICO just means you're probably smart enough to walk away quick when you're $100k underwater on your no-money down, interest-only palace.
  • November 19 2007
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Freddie Mac loss $2 billions.

Losses far exceeded Wall Street analysts expectations of a 22 cent per-share loss, according to a poll by Thomson Financial.

The results for Freddie Mac, together with a recent report by Fannie Mae, heighten investor anxiety over the government-sponsored companies, which had been considered less vulnerable in the housing crisis because have had less exposure to high-risk, subprime mortgages.

Freddie Mac said Tuesday it is "seriously considering" cutting in half its dividend in the fourth quarter and has hired Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. as financial advisers to help it examine possible new ways of raising capital in the near future.
  • November 20 2007
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Profile picture for CORONA NICK
In this world, nothing is contained...
  • November 20 2007
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Profile picture for caliguy
I blame the media. What credit crunch?
  • November 20 2007
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