tag:blogger.com,1999:blog-30643134.post3195704076044054294..comments2023-12-26T01:10:26.319-05:00Comments on Accrued Interest: Mortgage fall outAccrued Interesthttp://www.blogger.com/profile/05096191765979971184noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-30643134.post-56752048612841247822007-02-14T15:32:00.000-05:002007-02-14T15:32:00.000-05:00I think that depends on what you mean by "nothing ...I think that depends on what you mean by "nothing really wrong with the sub-prime market." If lenders were doing more low-doc/no-doc loans to sub-prime borrowers, then its still a big problem for the sub-prime market. When you buy a pool of sub-prime MBS, there is going to be a contingent of low-doc loans in there, and if an out-sized percentage of them go under, then your security might perform poorly.<BR/><BR/>That being said, I think weakness in HSBC bonds as well as the brokers is a smart entry point. This will pass.Accrued Interesthttps://www.blogger.com/profile/05096191765979971184noreply@blogger.comtag:blogger.com,1999:blog-30643134.post-26076166520134355212007-02-13T22:39:00.000-05:002007-02-13T22:39:00.000-05:00Something seems to have been lost from that HSBC r...Something seems to have been lost from that HSBC report when it's been echoed in the media. If you go back and read it along with an excellent piece from the wsj you'll discover that there's nothing really wrong with the sub prime market. There is something wrong with the alt-a (low-doc) mortgage writers. They are defrauding large banks and investors who are buying their pools in an effort to keep loan production high. It's ultimately in my view the result of the tremendous excess liquidity available in the market now. <BR/><BR/>The HSBC unit responsible for the increase in reserves was primarily engaged in a rapid building of their mortgage book through purchasing pools from third party originators. Rapid asset building by any bank or finance company is a pretty good indicator that there may be problems down the road and surprise, there were. It's likely more of an isolated event than anything else, if it were actually market related they wouldn't have disposed of the leadership of that part of the organization.Anonymousnoreply@blogger.com