Wednesday, October 01, 2008

Neutron Loans

Here is one of the building blocks of what are now being called "illiquid securities"


From the NYTimes: How Missed Signs Contributed to a Mortgage Meltdown. Here is the quote of the day:

“All of the old-timers knew that subprime mortgages were what we called neutron loans — they killed the people and left the houses,” said Louis S. Barnes, 58, a partner at Boulder West, a mortgage banking firm in Lafayette, Colo.

“We call them neutron loans because they’re like a neutron bomb,” said Brock Davis, a broker with U.S. Express Mortgage Corp. in Las Vegas. “Three years later the house is still there and the people are gone.”


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