Don't forget, five hundred to seven hundred foreclosures is the normal annual rate in the US. ... First, since approximately 500K-700K houses in the US go into foreclosure in a normal year (the real scandal, in truth), and yields on mortgage-backed securities are priced to reflect projected default rates (based, to be sure, on prior trends), presumably 25% to 35% of the problem was initially priced into the initial debt instrument issue already.
...
First, since approximately 500K-700K houses in the US go into foreclosure in a normal year (the real scandal, in truth), and yields on mortgage-backed securities are priced to reflect projected default rates (based, to be sure, on prior trends), presumably 25% to 35% of the problem was initially priced into the initial debt instrument issue already.
