S&P Increases Loss Estimates for Alt-A and Subprime RMBS
From Reuters: S&P raises loss expectations for risky US mortgages Standard & Poor’s on Monday boosted its expectations for losses on risky loans backing U.S. mortgage securities … [this] “significantly impact” bonds originally carrying AAA ratings, S&P said in a report. … S&P boosted loss projections for subprime loans made at the peak of the market in 2006 and 2007 to 32 percent and 40 percent from 25 percent and 31 percent, respectively. For 2005 loans, loss projections rose to 14 percent from 10.5 percent. For Alt-A loans … loss projections for 2006 and 2007 mortgages rose to 22.5 percent and 27 percent from 17.3 percent and 21 percent, respectively. S&P expects Alt-A loans from 2005 to post losses of 10 percent, up from its previous estimate of 7.75 percent
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