I suppose a key question is to what extent they can, and are, selling mortgages into the CDO markets; whether they're insuring such; and how, and how many, they keep on their own books.
In short: are they selling to Fannie and Freddie, or worse, acting like Fannie and Freddie, or are they still doing a Jimmy Stewart?
FoFP
Who are Fannie & Freddie, and what is a Jimmy Stewart?
Obviously specialist financial terms
Fannie Mae and Freddie Mac. Government Sponsored Enterprises in the US who buy up all the mortgages (or as near as makes no difference) and resells some of them into asset-backed bond markets packaged up with fancy insurance using CDO's.
See the movie "It's a Wonderful Life" starring Jimmy Stewart in a Savings and Loan (US Building Society) in which he explains that someone's house is built with other people's savings, which is how mortgages used to be made.
If you haven't seen the movie, you're missing out on a great movie, never mind the financial references.
FoFP
In message , Doug Ramage writes
I'm sure the amounts percentage levels turn up as multiguess questions in FPC and CeMap type exams, but I can't remember the limits either.
Thanks
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