Saturday, December 1, 2007

New Fitch Ratings Report: Impact of Poor Underwriting and Fraud on Subprime Loan Performance.

Report is dated Novermber 28,2007; link was obtained from Mortgage Bankers Association website.

PDF document is
HERE.

Report cautions that it is based on small file sample (45 loans), with nearly half of loans reviewed in California.

Page 5 of report has good summary of underwriting defects noted. Example, 2/3rds of reviewed files fraudulently stated owner occupancy intent.

Page 9 summarizes current industry problems/limitations in reporting fraud.

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