The S&P just downgraded a host of Alt-A securities. These are mainly mortgage backed securities that include subprime mortgages. Because of how behind the mortgage market is, about $41 billion in mortgage backed securities have been downgraded.
Alt-A loans
Alt-A loans are those that we often consider subprime mortgages. Due to credit requirements, those that get Alt-A loans don’t qualify for prime mortgage rates, and therefore pay a higher interest rate.
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