Magazine article Mortgage Banking

S&P Release Q2 Trends for RMBS

Magazine article Mortgage Banking

S&P Release Q2 Trends for RMBS

Article excerpt

ACCORDING TO A REPORT BY NEW YORK-BASED Standard & Poor's (S&P) Ratings Services, Trends in U.S. Residential Mortgage Products: Second-Quarter 2003 LTV Ratios, FICO[R] Scores and Credit Support Levels, S&P rated 87 prime residential mortgage-backed securities (RMBS) transactions in second-quarter 2003, an increase of five deals from the 82 deals rated in the first quarter. The average FICO score for these pools was 730.98, a decrease of approximately 1.75 from the first-quarter average of 732.74.

S&P also notes that the appetite of prime borrowers for hybrid adjustable-rate loans (adjustable-rate loans that have initial fixed-rate periods of three to 10 years) along with the appeal of traditional adjustable rate mortgage (ARM) loans to take further advantage of the current interest rate environment is evidenced by the continued strength of their securitizations. In the second quarter, S&P rated 26 such transactions. This trend is expected to continue throughout 2003.

In the alternative-A (alt-A) category, the second quarter FICO scores for the 30 year, fixed rate pools ranged from a high of 725 to a low of about 675 versus the first quarter's 737 and 675, respectively. The loan-to value (LTV) ratios among these pools ranged from a low of about 68 percent to a high of approximately 80 percent. …

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