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Department of Housing and Urban Development Summit on Housing: Partnering for Responsible Policy October 7, 2008. Tom Deutsch Deputy Executive Director American Securitization Forum. Comparison of 2006 RMBS Collateral Types.
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Department of Housing and Urban DevelopmentSummit on Housing:Partnering for Responsible PolicyOctober 7, 2008 Tom DeutschDeputy Executive DirectorAmerican Securitization Forum
Adding public record data shows substantially higher average number of liens per property Source: LoanPerformance
HFH/Short Sales with 2nds • Do you give existing 2nd ‘equity’/new 2nd? • How do you have that future value go into the securitization trusts? • Money in a card can be a better present • But how do you net present value (NPV) economic and legal right to underwater 2nd? • Home prices always go up, right? • 2nd has economic value • Servicer identifies HFH/short sale opportunity • “Split” = foreclosure loss – HFH/Short Sale loss
What % of Split should 2nd lien receive, if 2nd is underwater? • Systematic method important for market practice standard • Pro rata share of split (by principal balance) • OR, value =s all but a dollar of split • OR, value =s Expected Value (EV) of 2nd X (pro rata share) • EV=Measurement of HPA (Case/Schiller Index) • Or just a flat % of principal balance of 2nd • Will 2nds accept any of the above?