One could argue that investor sentiment toward subprime mortgages has become more optimistic in recent weeks. HEL spreads have tightened in the secondary and synthetic markets - and some new-issue deals have actually been over-subscribed.

Yet at last week's Information Management Network Spring ABS 2007 in Miami Beach, there was much speculation as to how market participants truly felt about subprime collateral. Do some truly believe that HEL fundamentals are bound to improve after the early defaults are weeded out - or are they simply looking to cleanse their own balance sheets of the product at a reasonable price?

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