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"The data over all still suggests that mortgage quality is weak, and I would expect that there will be further weakening and foreclosures that occur before the housing market improves," said Celia Chen, director of housing research at Moody's Economy.com.com
"Sometimes borrowers don't think buying a new car prior to closing a loan is a problem, but it is," said Carolyn Mitchell, a senior vice president of Aklero Risk Analytics, which provides software for mortgage quality control.
From 2005 through 2007, the GSEs purchased over $1 trillion in subprime and Alt-A loans, driving up the housing bubble and driving down mortgage quality.
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But several investors said that the standards now being set could be a problem if mortgage credit quality declines.
But rather than immediately issuing a mass downgrade of lower quality mortgage bonds, which would have had a devastating impact on the C.D.O.
While a stable real estate market with potential for high quality mortgage lending is one of the features Mr. Clark finds attractive about New York, he said that the market's sheer size is its chief attraction.
Financiers bundled low quality mortgage with high quality ones, issuing CDOs of dubious quality to unsuspecting investors.
"The evidence discloses troubling and sometimes abusive practices which show...that Goldman knowingly sold high risk, poor quality mortgage products to clients around the world," according to the Senate report.
It is harder today to get ahead and stay ahead -- to earn a good living that allows families to put enough food on the table, pay the rent or mortgage, get a quality education and even save a little for vacation every once and a while.
Municipals, Prime Mortgages and higher quality Corporate credit would be where we would be overweight currently.
MR. MILLIKAN, the BB&T fund manager, says he has found value in high-quality mortgage securities.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com