tag:blogger.com,1999:blog-4815867514277794362.post8312685257499528315..comments2024-03-08T06:18:28.125+11:00Comments on Bronte Capital: Why don't people buy AAA strips at 80c in the dollar? Top five reasons by requestJohn Hemptonhttp://www.blogger.com/profile/03766274392122783128noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-4815867514277794362.post-64651633468721200332008-06-20T10:04:00.000+10:002008-06-20T10:04:00.000+10:00I will - following emails from readers - add one ...I will - following emails from readers - add one more reason. The collateral is often all mixed up. For instance second liens should have severity of over 100 in the midwest - as you only have liquidation costs and the property price has gone to zero.<BR/><BR/>Some stuff was originated as just Alt-A - meaning the person had a reasonable credit record in advance and maybe bought some collateral to the table - but didn't qualify for a Fannie loan. Some borrowed closing costs. The Alt-A collateral can still default - but a severity of 50 would be surprising. The person that borrowed the closing costs would have diabolical severity. If they bought no money to the table it is likely they overpaid for the house by 20% too at the top of the market...<BR/><BR/>So score a sixth reason... all mixed up collateral on some paper...<BR/><BR/>JohnJohn Hemptonhttps://www.blogger.com/profile/03766274392122783128noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-67256080326107639572008-06-20T03:12:00.000+10:002008-06-20T03:12:00.000+10:00Peter is Peter Eavis. Nice post.Peter is Peter Eavis. Nice post.Peter Eavishttps://www.blogger.com/profile/02447714589164364945noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-83827160995958712082008-06-20T02:18:00.000+10:002008-06-20T02:18:00.000+10:00Great answers to a question I didn't ask! I liked ...Great answers to a question I didn't ask! <BR/><BR/>I liked your quote on the other page about not being able to borrow to buy the paper anymore. I wonder if that partially explains one market that I've been tinkering in lately, municipal auction resets.Huntington Hartfordhttps://www.blogger.com/profile/06253593320858272112noreply@blogger.com