Mish's Global Economic Trend Analysis Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

From: Think4Yourself	3/20/2008 8:20:38 AM
	Read Replies (1) of 116555

What happens to CDO and RMBS stability/value if the solid underlying mortgages are paid off early but the garbage loans aren't? I see that scenario as a likely outcome of what is happening now. People with solid credit will pay off their current mortgages by refinancing into new lower rate mortgages. People with credit problems will be stuck with their mortgages. Guess the real underlying question is, do the value of the securities depend directly on whether most mortgages being held to maturity? Will a lot of prepayments make the CDO's more, or less, valuable? We are paying off our rock solid mortgage in the next week.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next