Following the 2000 Dot Com crash, then Fed Chair Alan Greenspan brought Fed Funds rates down to ultra-low levels. Under 2% for 3 years, and 1% for more than a year. Rates this low — and for that long — were simply unprecedented. They wreaked havoc with the traditional fixed income market. Bond managers scrambled for yield, and found it in investment grade, triple A rated residential mortgage-backed securities (RMBS). This better interest rate was created by securitizing mortgages with an unhealthy slug of higher yielding, riskier, sub-prime mortgages.
A closer look at the second leg down in housing
Most Popular Articles
Latest Articles
Kristen Sieffert leads the reverse mortgage presence at The Gathering
FOA’s president spoke about bringing reverse mortgages into the mainstream at the event in Scottsdale, Arizona.