Posted on May 5th, 2008 in Mr Mortgage's Personal Opinions/Research
The ALT-A crisis may make the subprime crisis look like a bump in the road when all is said and done. This story is really picking up steam, but it seems that, as with the suprime crisis, the mainstream media is not giving this much attention. In my opinion, the ALT-A space collapsing could cause much larger crisis for the broader economy because ALT-A loans cut across all socio-economic boundaries and were used most heavily in in the nation’s most affluent cities/regions.
Many said a year ago when New Century collapsed that they were the ‘canary in the coal mine’. I have always said ‘the entire subprime sector is the canary in the coal mine’.
Below is the Moody’s/LEH news just released and below that are various Mr Mortgage reports on the ALT-A crisis coming to a city near you right now. -Best Mr Mortgage
12:59PM Lehman Brothers: Moody’s takes action on certain Lehman Alt-A deals (LEH) 46.30 -0.76 : Moody’s has downgraded the ratings of 28 tranches from eleven Lehman Mortgage Trust deals. Three tranches remain on review for possible further downgrade. Additionally, 103 tranches were placed on review for possible downgrade. The collateral backing these transactions consists primarily of first-lien, fixed, Alt-A mortgage loans. The ratings were downgraded or placed on review, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels.
LEHMAN’S DIRTY ALT-A EXPOSRE – Mr Mortgage youTube Series