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Home » Store » News » Changes to S&P Methodology Result in Higher Loss Estimates for 2005-2007 Subprime, Alt A Deals

Changes to S&P Methodology Result in Higher Loss Estimates for 2005-2007 Subprime, Alt A Deals

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Changes in the method and assumptions used by Standard & Poor’s to project losses for residential MBS has resulted in higher loss assumptions for deals backed by subprime and Alt A collateral. The higher default and loss severity adjustments were on subprime deals issued in 2005, 2006, 2007, which showed losses rising to 14.0 percent, 32.0 percent, and 40.0 percent, respectively. The loss...
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