subprime comments from S&P analysts

"The subprime mortgages experiencing the weakest credit performance are a small subsegment of this market, and one with the highest layering of underwriting risk. By high-risk layering, we mean the tendency to accumulate high-risk credit factors: A low FICO score (low 600s and below), no income documentation, no asset documentation, no down payment or second mortgage collateral in lieu of the down payment, and a purchase mortgage. This "perfect storm" of risk layering in underwriting subprime mortgages is unprecedented. " We expect a normalization of commercial and consumer losses across all loans... Company diversified across a broad spectrum of the mortgage market, aligned with strong interest rate and credit risk management oversight, will surve. The growth of specialty-finance lenders depends on their acess to capital markets and third party funding, such as mortagae warehouse lines Critical to the keeping these funding lines open are their credit quality and capital strength. Once these