Subprime and Prime Mortgage Performance Trends Coming More in Line as Collateral Ages
January 13, 2012
The aging of the subprime and prime mortgages that back the shrinking universe of non-agency MBS is gradually changing the performance trends of these loans, according to analysts speaking at a Fitch Ratings conference in New York this week. Selection bias changes in the composition of the remaining subprime and prime mortgage pools as borrowers default or refinance will mean different things for different asset classes, but differences between the two will likely become less pronounced over the next year, analysts said. Grant Bailey, a managing director at Fitch, explained that in many ways...