Saturday, December 19, 2009
Time to review those ratings!
"Moodyâ€™s Investors Service placed $143 billion of US jumbo-mortgage bonds under review for downgrades because of higher loss projections as stock-market losses and pay cuts squeeze wealthy borrowers. It now expects losses of 3.8 percent on loans underlying 2005 prime- jumbo bonds, with estimates of 8 percent for 2006 securitizations, 10.9 percent for 2007 debt and 12.3 percent for 2008 securities". The revisions were prompted by â€œthe rapidly deteriorating performance of jumbo pools in conjunction with macroeconomic conditions that remain under duress,â€ Moodyâ€™s said.