Friday, October 05, 2007
Tanta Posting Pull-Quote of the Day
by Ken Houghton
If the sentence didn't include that adverb at the beginning, would you look up and say, "Interesting..." at the end of reading it?
Or would you say, "That's obvious. As Felix Salmon noted, '[Y]our mortgage is pretty much the last thing you're going to default on.' Loan-to-Value has nothing to do with whether you can pay your mortgage, and FICO is going to be at best a lagging indicator.
"The idiocy was in attributing all-seeing power to those factors in the first place."
from Moody's September 2007 Subprime Mortgage Market Update, as cited by Tanta at CR:
Interestingly, FICO scores and LTV ratios do not vary significantly between the strongest and weakest performing transactions and on average transaction performance does not appear to have been influenced by these characteristics.
If the sentence didn't include that adverb at the beginning, would you look up and say, "Interesting..." at the end of reading it?
Or would you say, "That's obvious. As Felix Salmon noted, '[Y]our mortgage is pretty much the last thing you're going to default on.' Loan-to-Value has nothing to do with whether you can pay your mortgage, and FICO is going to be at best a lagging indicator.
"The idiocy was in attributing all-seeing power to those factors in the first place."
Labels: Calculated Risk, mortgage, subprime
