“MC” sent a few new charts of the Washington Mutual Alt-A pool WMALT 2007-0C1 that I have been tracking. Chris Puplava at Financial Sense provided additional charts.

Thanks Chris and “MC”.

WMALT 2007-0C1 pool has been the “poster child” for what is happening with Alt-A. Although it is just one pool, it is arguably indicative of the rotten nature of liar loans in general.

Pool Stats

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Inquiring minds may be asking about lines 7 and 8 on the above screen.

  • Line 9 is the sum of lines 4, 5, 7, and 8 (anything 60 days late or greater plus all previous foreclosures and REOs)
  • Line 10 is the sum of lines 5, 7, 8 (anything 90 days late or greater plus all previous foreclosures and REOs).

REOs and Delinquencies are Soaring

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REOs right scale, 90+ delinquencies left scale

Foreclosures are Soaring

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Foreclosures right scale, delinquencies left scale

Cesspool Data

The pool data just keeps getting uglier and uglier.

Month      REO     60+

10-2007 0.00% 11.53%
11-2007 0.04% 13.30%
12-2007 0.64% 16.83%
01-2008 1.83% 19.32%
02-2008 3.56% 22.69%
03-2008 4.44% 24.86%
04-2008 6.21% 28.69%
05-2008 7.77% 30.41%
06-2008 10.48% 31.53%
07-2008 10.83% 32.75%
08-2008 11.89% 34.65%

Say GoodBye To Reporting On This Cesspool

This is the last update on this tragic cesspool. The reason can be found in the following chart of Rating Changes.

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On 2008-08-25, at long last, the S&P; finally saw fit to downgrade tranches A1-A4 to BBB and A5 to B where they belonged many, many months ago. Moody’s still has not acted but most likely soon will.

“MC” writes “This is the widest split rating that I have ever seen”.

Now that there is more realistic ratings (at least from the S&P;), I see little reason to keep tracking this pool. However, I have a potential new poster child in the on deck circle that we can look at.

Tranche List

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Tranches A1-A5 represent 92.5% of this pool, yet It took pool delinquencies in excess of 34% and REOs approaching 12% to get the S&P; to finally act.

If this is the best Moody’s and the S&P; can do, they do not belong in business. In my opinion, the only reason they can possibly survive with rating performance so lousy is because of SEC sponsorship.

I gladly repeat what I have said many times over the past year: It’s Time To Break Up The Credit Rating Cartel.

Mike “Mish” Shedlock
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