Pursuits
Moody’s Assumed 4% Annual Home Price Rises in Bond Rating Model
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Moody’s Corp. assumed U.S. home prices would rise 4 percent a year when it developed a model in 2003 to rate mortgage-backed securities, according to the Financial Crisis Inquiry Commission.
Prices instead plunged 28.5 percent from July 2006 through the low reached in February last year, according to the Chicago-based National Association of Realtors. Moody’s failed to foresee the decline, the commission concludes in a 545-page book seen by Bloomberg News and due to go on sale today.