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It would hold out for something unassailable, like, say, Triple A mortgages on American homes.
New issues rated by S&P fell 29% in the fourth quarter of last year over the same period in 2005.Others are scrutinising "Alt A" mortgages, underwritten with little or no documentation of, say, a borrower's income.
Some $10.8 billion of the write-downs came from its investments in subprime mortgages, $2 billion from the Alt A mortgages, and $871 million from credit protection bought from monoline bond insurers for investing in collateralized debt obligations.
The fund previously had exposure to Alt A mortgages, but it cut the positions loose two years ago.
The first requirement is a program for refinancing whole loan mortgages that were poorly underwritten, such as option ARMs, subprime ARMs and ALT A mortgages.
Mr. Wolk said subprime loans, those with more onerous terms, and Alt A mortgages, ones with more flexible borrowing conditions, accounted for nearly half the home loans in some South Side neighborhoods.
Similar(51)
As home prices soared in recent years, IndyMac carved out a lucrative niche in so-called Alt-A mortgages.
Visiting the housing estates that these triple-A mortgages are secured against, they find foreclosures and dereliction.
Disclosures accompanying third-quarter results, for instance, showed a lot of disparity in the valuation of Alt-A mortgages (though definitions of what constitutes Alt-A can vary).
Although further falls in the value of assets like Alt-A mortgages would hurt, they would not chew up too much equity.
At the peak there were well over $1 trillion in subprime and Alt-A mortgages that were securitized on Wall Street.
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