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Exact(42)
Those securities would not default unless a large portion of the underlying loans went bad, and that was deemed unlikely.
The magic consisted of turning risky mortgages into investments that would be suitable for investors who would know nothing about the underlying loans.
And, MBIA added, Merrill knew that the rating agencies also would not bother to look at the performance of the underlying loans in issuing their ratings.
The risk of being hauled into court should persuade investors to look closer at the underlying loans to make sure that they conform with federal law.
Then the market collapsed in 2008 as the underlying loans soured, helping to incite the worst economic rout since the Great Depression.
Issuers of mortgage-backed securities, in turn, would be required to disclose "more granular information" about the quality of the underlying loans and their procedures for verifying the information in those loans.
Similar(18)
The underlying loan impairment of $4bn£2.9bnbn) in 2015 rose 87%, with 40% related to "a number of exposures beyond our tightened risk tolerance", to use new chief executive Bill Winters' coy phrase.
"We haven't seen lower volumes".When a Danish mortgage bank grants a mortgage it is obliged to sell an equivalent bond with a maturity and cashflow that matches those of the underlying loan almost perfectly.
It would cost Saint-Étienne €20 million today to cancel the Deutsche Bank swap, Mr. Grail said, while still leaving the town to pay off the €19 million left in the underlying loan from Dexia.
And there was no examination of the underlying loan files".
After sampling around 900,000 mortgages in 2006 and 2007, Clayton told its clients that around 300,000 failed to meet standards — the homeowner might have lacked assets, for example, or the underlying loan document might have been faulty.
Related(20)
originating loans
involving loans
guaranteeing loans
underlying interests
surrounding loans
lingering loans
resulting loans
regulating loans
principle loans
corresponding loans
essentially loans
underlying analytics
underlying trends
underlying Complexities
underlying workings
underlying patterns
underlying structures
underlying factors
underlying rents
underlying weaknesses
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