Thanks for clarification. What category of loans did the so-called liar loans fall into and what were their characteristics? Dick
From: MicrofinancePractice@yahoogroups.com [mailto:MicrofinancePractice@yahoogroups.com] On Behalf Of danrozas@yahoo.com
Sent: Tuesday, February 18, 2014 9:55 AM
To: MicrofinancePractice@yahoogroups.com
Subject: [MFP] RE: The Equal Credit Opportunity Act / USA
Thanks Dick -- indeed, there's much to explain. The article provides some background -- I'd post the text here, but it's really dependent on referencing the graphs in the blog...
Anyway, briefly, Alt-A loans are best described as loans to people with reasonably high credit scores (i.e. good credit history), but the loans had other risky characteristics -- lower requirements for income documentation, for example, higher leverage, interest-only repayment periods, etc. Before the crisis, the repayment rates on these loans were only slightly lower than prime loans (i.e. highest quality loans), but they really tanked once the mortgage market collapsed. Take a look at the blog, which goes into more detail:
Daniel
| Reply via web post | Reply to sender | Reply to group | Start a New Topic | Messages in this topic (8) |
No comments:
Post a Comment