Down on upgradesBy
People like to joke that the bank owns their home. The reality is it's likely a mutual fund or institutional investor in the booming secondary mortgage market. Issues of mortgage-backed securities have skyrocketed in recent years. A recent report from bond-rating agency Standard & Poors says that the second quarter saw the highest number of ratings downgrades in history for mortgage backed securities. The number of upgrades declined 33%, the number of downgrades tripled. A portion of this is due to the fact that low rates caused people prepay their mortgages. But it seems too that the mortgage industry has lent money to people it shouldn't have and that's a problem we may see more of.
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