Sentences with phrase «mortgage bonds defaulted»

Unfortunately, enough of these subprime mortgages defaulted to cause a crisis, amid which many mortgage bonds defaulted, costing investors millions of dollars.

Not exact matches

Not only isn't there anywhere near enough bank capital in the US to supplant securitization, it is difficult to conceive that the universe of «rates» buyers will become mortgage credit buyers or move over to covered bonds (which default to the issuing bank's credit ratings), at least not at the same price levels and in the same size.

The Obama Administration's Wall Street managers have kept the debt overhead in place — toxic mortgage debt, junk bonds, and most seriously, the novel web of collateralized debt obligations (CDO), credit default swaps (almost monopolized by A.I.G.) and kindred financial derivatives of a basically mathematical character that have developed in the 1990s and early 2000s.

For example, if a borrower defaults on their mortgage, Fannie and Freddie are responsible for the losses on the loans they guarantee to investors, while Ginnie Mae is financially responsible for the bond payments to the holders of Ginnie Mae securities.

If the film were described as a tutorial on MBS (Mortgage - backed Securities), CDO (Collateralized Debt Obligations), Credit Default Swaps, Tranches, Bond Ratings, and Sub-Prime ARMs, most people's eyes would glaze over and they would keep skimming for showtimes of other new movie releases.

When the investors in the Big Short predicted the Global Financial Crisis by examining the credit quality of the bonds underlying the popular mortgage - backed securities, they purchased credit default swaps against the MBSs & CDOs and profited tremendously.

The bubble was a combination of (a) teaser rates on option ARMs which were like financial time bombs, (b) liar loans in which the rules of good mortgage underwriting (20 % down, 28/36 ratios) went out the window, (C) people at rating agencies who decided that if one pools enough junk loans into one bond, it's magically AAA, and (D) Credit default swaps which encouraged these bad loans, and when they collapsed a number of people walked away with billions of dollars.

Second, as mortgage foreclosures and writeoffs predictably increase in the coming quarters, we are likely to observe a fresh demand for Treasury bonds as a safe - haven because of their lack of default risk.

I would add in other asset classes as well: credit default, emerging markets, junk bonds, low - quality stocks, the toxic waste of Asset - and Mortgage - backed securities, and private equity.

A credit default swap is the most common form of credit derivative and may involve municipal bonds, emerging market bonds, mortgage - backed securities or corporate bonds.

Carlyle Capital Corporation receives a default notice after failing to meet margin calls on its mortgage bond fund.

They repackaged these loans and used them as collateral for bonds called mortgage - backed securities; they guaranteed buyers of those securities against default.

Though it may have seemed a good idea at the time, allowing for lower quality collateral has caused the creditworthiness of several catastrophe bonds to suffer as Lehman defaulted, and as losses on subprime mortgages rose.

Because the mortgage collapse is under way, the underlying bond seems more likely to default than it did before.

Credit ratings can also speak to the credit quality of an individual debt issue, such as a corporate note, a municipal bond or a mortgage - backed security, and the relative likelihood that the issue may default.

Investments include various types of bonds and other securities, typically corporate bonds, notes, collateralized bond obligations, collateralized debt obligations, mortgage - related and asset - backed securities, bank loans, money - market securities, swaps, futures, municipal securities, options, credit default swaps, private placements and restricted securities.

Mortgages are priced higher than bonds, usually between about 1.2 per cent and 1.9 per cent, to account for higher risk of default and administration costs incurred by investors who hold mortgages as opposed to relatively hassle - frMortgages are priced higher than bonds, usually between about 1.2 per cent and 1.9 per cent, to account for higher risk of default and administration costs incurred by investors who hold mortgages as opposed to relatively hassle - frmortgages as opposed to relatively hassle - free bonds.

It is also an important structural protection in the Commercial Mortgage Backed Securities (CMBS) market — without it, some firms may decline to rate or cap their ratings on such transactions, causing CMBS borrowers to face the threat of default or bond downgrades.

Freddie Mac and rival Fannie Mae have been stuck with a bevy of soured mortgages, bought out of bonds they guaranteed, after a surge in defaults amid the U.S. housing crisis.

Freddie Mac has been saddled with soured mortgages, bought from bonds the company guaranteed, after a wave of defaults in the housing crash.