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New York-Wall Street is flocking to 125% loan-to-value securitizations in droves as investors begin to accept the unusual LTV ratio and the delinquency rate remains low, according to one expert.
Although one prominent Wall Street firm, which asked that its name not be used, said that securitizing loans made at a 125% LTV ratio was a poor investment move, another said that a number of brokerage firms are now underwriting these securitizations and they've been very successful doing so.
The firm that said it wouldn't touch these loans said that securitizing 125% lT/o ITV loans "is like the 1980s it's just giving money away. (We) just couldn't imagine why anyone would do this."
But Gordon Monsen, managing director with PaineWebber, Inc. said that in addition to his firm, at least three other firms - Bear, Stearns, Greenwich Capital and Banc...