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Home » News » Cash Flow Discrepancies Between Collateral, Bond Payouts Create Problem for Non-Agency Deals
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Cash Flow Discrepancies Between Collateral, Bond Payouts Create Problem for Non-Agency Deals

April 6, 2012
Non-agency MBS deals have been plagued in the last two to three years by increasing instances of gaps and mismatches between expected collateral cash flow and payouts to bond holders, according to analysts at Barclays Capital. Most of the mismatches are attributable to balance capitalization, modifications and advances, either stopped or recovered by the mortgage servicers. Since most of the discrepancies are due to the treatment of delinquent mortgages, the gaps are widest in subprime. Sporadic mismatches have been spotted in option ARMs and Alt A hybrid loans as well, the analysts said...
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