Nonprime lenders defended mortgages underwritten with borrowers’ bank statements after criticism of the loans by Fitch Ratings. Steven Schwalb, CEO of Angel Oak Home Loans, a nonprime lender that offers bank-statement mortgages, noted that the loans measure borrowers’ cash flow more precisely than the tax returns used for traditional income verification. “We’re comfortable with the risk of that borrower,” he added, during a panel discussion at the ABS East conference produced by Information Management Network last week in Miami Beach. Bank-statement mortgages account...