You can learn a lot by looking under the hood of the conked-out subprime mortgage-backed security business. Some of the mortgages underlying those securities were pretty good and others were very, very bad. WMC of Burbank, Calif., which was acquired in 2004 by General Electric, underwrote some of the worst mortgages, according to an analysis last week by finance expert Tom Brown (pictured), head of BankStocks.com, over at Seeking Alpha. Wells Fargo wrote some of the best subprime loans. Proof? Securities that are chock-full of WMC mortgages are doing extremely badly, while ones rich in Wells Fargo mortgages are holding up much better. Brown’s point: You can’t generalize about mortgage-backed securities since they’re all different.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.