Wednesday, September 23, 2009

But computerised credit scores did?

Maybe Securitization Didn't Cause the Crisis

If you plot credit scores against the number of mortgages outstanding, you'll notice a peculiar pattern: instead of a smooth curve, at certain round-number scores there are big jumps in the number of people with mortgages. The typical loan officer didn't put much effort into checking up on people with scores higher than 620, because he knew these loans would be securitised off his books.

Posted by drewster @ 10:21 PM (709 views)
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One thought on “But computerised credit scores did?

  • Securitization has an utopic concept behind. The risk can not be spread arround the world and so ignore the quality of loans the banks have to make.

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