POSTED BY: SARA SINDELAR
By Allan Sloan and Doris Burke
NEW YORK (Fortune) -- Back two years ago when the mortgage meltdown was heating up, we wrote an article called "Junk Mortgages Under the Microscope" dissecting a particularly wretched mortgage-backed securities issue peddled by Goldman Sachs.
We wanted to show how these complex securities really worked and how Moody's and S&P, the rating agencies, aided and abetted the process by giving two-thirds of an issue backed by ultra-risky second mortgages the same safety rating they gave to U.S. Treasury securities.
We thought this was a cautionary tale -- but it's turned into a horror story. All the tranches of this issue, GSAMP-2006 S3, that were originally rated below AAA have defaulted. Two of the three original AAA -rated tranches (French for "slices") are facing losses of about 90%, and even the "super senior," safer-than-mere-AAA slice is facing losses of 25%. How could this happen? And what lessons can we take away from it?
Click Here to Read More
Way cool! Some very valid points! I appreciate you writing this post and
ReplyDeletealso the rest of the site is extremely good.
Also visit my web site ... http://www.m-x.tv/node/15013
Regular mortgage brokers cannot providing loan earlier than hard money lenders. Hard money lenders can lending money within 1 week because they are directly dealing with private money investors.
ReplyDelete