Brad Ellis
Senior Member
- Joined
- Feb 7, 2006
- Professional Status
- Certified Residential Appraiser
- State
- California
Greg,
From that article is an incorrect definition of Alt-A, it said:
"It's not something you hit on your computer keyboard. It's a catchall loan category between the prime (for consumers with good credit) and subprime (for consumers with poor credit histories).
Alt-A loans nowadays are for consumers who don't submit all the documentation that would be required to qualify for a traditional straight loan. They're usually chosen by people with unsteady sources of income. Their credit scores generally range from 620 to 680. (Folks who get the best rates in the prime category usually have a credit score of at least 720, according to the Office of Thrift Supervision.)"
It is ONLY for borrowers with good credit and refers only to the level of documentation and NOT the credit score. So, most of the second paragraph is correct (I do not know the credit score range for those folks so the entire paragraph might be right or only a part of it). The last sentence is correct.
And it is often chosen by folks with regular income levels only the levels vary some- it is not necessarily "unstable", just variable. My income is very stable yet I did an Alt-A loan for reasons I choose to keep private. I will tell you my mortgage FICO when I did it- 838. One's FICO will vary according to the type of credit- for example at the very same time my auto purchase/finance FICO was about 740.
Indymac's Alt-A average credit score for all Alt-A is over 700. Its actual credit losses attendant to those loans from 2002-2006 was .881 of one basis point. That is right- under one basis point. If we triple the credit losses we are still under the industry average. Right now credit losses on Alt-A are 1/17th of sub-prime losses.
So, you think we might go out of business, eh? I'll bet you any amount of money you care to wager- the bigger the better- that your assumption is wrong.
About the only thing the OC Register got right are the comments from the outside analyst when he said that it hardly matters what the actual credit profile is on a loan when you go to sell it IF Wall St. will not pay a fair price for it. THAT is what is going on for sure and I've said that repeatedly.
The OC analyst, however, ought to be fired for being an imbecile.
Brad
From that article is an incorrect definition of Alt-A, it said:
"It's not something you hit on your computer keyboard. It's a catchall loan category between the prime (for consumers with good credit) and subprime (for consumers with poor credit histories).
Alt-A loans nowadays are for consumers who don't submit all the documentation that would be required to qualify for a traditional straight loan. They're usually chosen by people with unsteady sources of income. Their credit scores generally range from 620 to 680. (Folks who get the best rates in the prime category usually have a credit score of at least 720, according to the Office of Thrift Supervision.)"
It is ONLY for borrowers with good credit and refers only to the level of documentation and NOT the credit score. So, most of the second paragraph is correct (I do not know the credit score range for those folks so the entire paragraph might be right or only a part of it). The last sentence is correct.
And it is often chosen by folks with regular income levels only the levels vary some- it is not necessarily "unstable", just variable. My income is very stable yet I did an Alt-A loan for reasons I choose to keep private. I will tell you my mortgage FICO when I did it- 838. One's FICO will vary according to the type of credit- for example at the very same time my auto purchase/finance FICO was about 740.
Indymac's Alt-A average credit score for all Alt-A is over 700. Its actual credit losses attendant to those loans from 2002-2006 was .881 of one basis point. That is right- under one basis point. If we triple the credit losses we are still under the industry average. Right now credit losses on Alt-A are 1/17th of sub-prime losses.
So, you think we might go out of business, eh? I'll bet you any amount of money you care to wager- the bigger the better- that your assumption is wrong.
About the only thing the OC Register got right are the comments from the outside analyst when he said that it hardly matters what the actual credit profile is on a loan when you go to sell it IF Wall St. will not pay a fair price for it. THAT is what is going on for sure and I've said that repeatedly.
The OC analyst, however, ought to be fired for being an imbecile.
Brad
