NEW YORK - At the Bond Market Association's annual meeting held here last week, rating agency representatives discussed how both prime and subprime borrowers are increasingly moving into alternative mortgage products that have a future payment adjustment such as hybrid mortgages, IO loans and option ARMs - innovations that have thus far supported the housing market, but have some negative credit implications. Attendees also gave their outlook on the housing and commercial real estate sectors.

With little history backing these new affordability products, panelists said that it has become a challenge to model or predict borrower behavior. However, they also acknowledged that these products are starting to become a significant part of the housing market.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.