

New York Fed research paper: "Understanding the Securitization of Subprime Mortgage Credit" [PDF] - ctkrohn
http://www.scribd.com/vacuum?url=http://www.ny.frb.org/research/staff_reports/sr318.pdf
For those of you who are interested in learning what REALLY went on with the subprime mortgage crisis, the NY Fed has provided the best description yet.  It's long (82 pages), but not too technical.  You don't need to be familiar with securitization or the mortgage-backed securities markets to understand it.<p>Abstract: "In this paper, we provide an overview of the subprime mortgage securitization process
and the seven key informational frictions that arise. We discuss the ways that market
participants work to minimize these frictions and speculate on how this process broke
down. We continue with a complete picture of the subprime borrower and the subprime
loan, discussing both predatory borrowing and predatory lending. We present the key
structural features of a typical subprime securitization, document how rating agencies
assign credit ratings to mortgage-backed securities, and outline how these agencies
monitor the performance of mortgage pools over time. Throughout the paper, we draw
upon the example of a mortgage pool securitized by New Century Financial during 2006."
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ctkrohn
For those of you who are interested in learning what REALLY went on with the
subprime mortgage crisis, the NY Fed has provided the best description yet.
It's long (82 pages), but not too technical. You don't need to be familiar
with securitization or the mortgage-backed securities markets to understand
it.

Abstract: "In this paper, we provide an overview of the subprime mortgage
securitization process and the seven key informational frictions that arise.
We discuss the ways that market participants work to minimize these frictions
and speculate on how this process broke down. We continue with a complete
picture of the subprime borrower and the subprime loan, discussing both
predatory borrowing and predatory lending. We present the key structural
features of a typical subprime securitization, document how rating agencies
assign credit ratings to mortgage-backed securities, and outline how these
agencies monitor the performance of mortgage pools over time. Throughout the
paper, we draw upon the example of a mortgage pool securitized by New Century
Financial during 2006."

