Non-Agency RMBS: Observation Smorgasbord
In today’s commentary, we present a smorgasbord of observations. It is important to study the data and document and share the results, as there is lots to learn from the mistakes of the past. Many of the lessons learned can help us avoid trouble in whatever product we invest in next. We caution you to be wary of using pre-crisis loan performance as a predictor of future performance. As we have seen, there are many factors that affect performance including: product types, underwriting quality, quality of appraisal, changes in interest rates, changes in home prices, the economy, the ability to refinance, public sentiment, quality of servicing, and the proliferation of mortgage brokers. It is never easy to take historical performance and equate it to new originations as too many factors have to be held constant, some which are obvious and some which are not.
Topics in today’s commentary
Performance Stats: January 2015
Forced Placed Insurance?
Zip Codes with the Highest Loss Severity – 2014
Now you see it, Now you don’t (Razed Homes)
Zip Codes with the Lowest Loss Severity – 2014
Suspected Make Whole Payments / Losses Left in Trust
Time in Delinquency – by State
Loan Modifications: Largest P&I Payment Percentage Decrease – January 2015
Historical Performance at Month 36
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