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|User Info||Koolaid iditots; entered at 2007-12-02 01:15:43|
Registered: 2007-09-11 Live Free Or Die; US Army Est. 1775
First mortgage liens are inherently more valuable than subordinated MBS tranches, regardless of credit rating. This much should be obvious.
Are they? Consider that most 1st mortgages seem to have a HELOC or a 2nd or even a 3rd accompanying them...and that HELOC, 2nd or 3rd holder has the right to call that loan in, independent of the 1st. THEY can foreclose too. Seems to me that just because you have a 'majority' interest doesn't mean you are more likely to have #1. a performing loan or #2. preservation of capital in the underlying collateral.