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Monday, September 01, 2008 10:49 PM

WaMu Pool WMALT 2007-0C1 August Update

Mish Moved to MishTalk.Com Click to Visit.

"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

click on chart for sharper image

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

click on chart for sharper image

REOs right scale, 90+ delinquencies left scale

Foreclosures are Soaring

click on chart for sharper image
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.

click on chart for sharper image

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

click on chart for sharper image

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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