Friday, October 05, 2007

Shocking

This problem is still out there.

Subprime-mortgage bonds created in the first half of 2007 contain loans that are going delinquent at the fastest rate ever, Moody's Investors Service said yesterday.

The average rate of "serious loan delinquencies" in the securities has been higher than for bonds created last year, Moody's analysts Ariel Weil and Amita Shrivastava wrote in a report. Serious loan delinquencies are those 60 days or more past due and include properties in foreclosure or already foreclosed upon.

"It is shocking what you see," said Kyle Bass of Hayman Advisors L.P., a Dallas hedge fund that bet the U.S. housing market would fall. It reported a 400 percent return on those investments.

"Anything securitized in 2007 has got to have the worst collateral performance of any trust I've seen in my life," Bass said.