Collateral is Collateral

Poor Bear continues to take a beating for the rest of the industry in the headlines as the following article discusses the reality on the ground as Bear and others have started seizing properties through foreclosure at historical rates.

Bear Stearns Meets Possums in Georgia as Foreclosures Increase


The fact that some of these sales are taking place at half the purchase price of the homes, suggests that it may likely be more than just the unrated junk piece of the securitization that is getting wiped out...

But then again, maybe there is enough "diversification" to mitigate this effect. I wonder what Moody's thinks.