Ratings Agency Missing the Boat on Some Alternative Mortgage Products, Investors and Traders Suggest
March 10, 2006
Are MBS ratings experts getting it right when it comes to setting enhancement levels and trigger mechanisms for alternative mortgage pools and home-equity loan deals? The ratings services think so. But some bond traders, investors and loan traders say otherwise. Various industry participants complain that the rating agencies were taking too hard a line on products ranging from high loan-to-value mortgages to option ARMs. “In general, the rating agencies have a tough job,” noted…