October 15, 2010
my RMBS score system.
in each case 1 point is assigned, if the metric is missing or never checked by bank or fails the test, a minus -1 is assigned.
FICO over 600 = Plus +1
FICO history over 5 years = +1 ( no thin files)
LTV over 90% = +1 (loan to value or 10% down payment ,skin in game rule)
Debt to income 40% = +1
6 months assets (liquid) to cover 6 months mortgage+tax =+1
Employed for 6 months = +1
Mortgage meets investment grade rules. +1
Buyer gave 3 years IRS 1040s as proof of income. +1
Bank obtained independent , house assessor evaluation = +1
County property tax assessor evaluation is with-in 10% of above.=+1
+10 point + is perfect.
-10 points is failure.
this for EVERY MORTGAGE IN the pool.
Then average the whole pool , and listing min and max.
for CDO and bond.