Question-and-Answer Session
Operator
Thank you. (Operator instructions) And our first question then today comes from the line of Mike Grasher with Piper Jaffray. Please go ahead.
Mike Grasher – Piper Jaffray
Thank you, and good morning. Bob, just going back to the TRuPS, can you give us a little bit more detail around – and I understand subordinations are high and they look fairly reasonable here. But can you give us more details or examples around, maybe an issue or two in your experience on foreclosures within any of the particular issues?
Bob Quint
Mike, I think what you mean maybe is defaults. And the predominant the reason for the deterioration in the TruPs is due to deferrals rather than defaults. There have been some defaults, but there have been many deferrals. So the banks have chosen to defer interest and that impacts the cash flow of the deal.
Mike Grasher – Piper Jaffray
Okay. So when we read about the Feds going in and closing down community banks here and there, are you saying that’s no impact at all on your issue?
Bob Quint
Well, if there is a default, then that would reduce the subordination in the deal. If there is a deferral that’s going to impact the cash flow within the ultimate outcome of the those deferrals whether the deferrals become defaults – and like we said they have five years – or they end up curing, that will impact the ultimate outcome of the deals.
Mike Grasher – Piper Jaffray
Okay. That’s helpful. Then also with regard to the bulk of new claims that are coming through, can you talk about the vintage that maybe those lie in? Are they still coming through for '06, '07, and ’08? Have those changed or can you give us some mix of what the new claim activity looks like?
Teresa Bryce
Hi, this is Teresa. Yes, most of them we are still seeing are in the vintages of 2006 and 2007, some obviously for 2008, but clearly mostly 2006 and ’07.
Mike Grasher – Piper Jaffray
Okay. Is it your sense that if you think about the ’06, ‘07 claims that have already come though versus the new ones that are arriving, is there a difference in the type of claim? In other words, is it – are the earlier claims more related to the fraud and maybe terms for rescissions versus the new ones coming through, maybe tied to less about credit quality, but more about I guess the ability to make the mortgage payment or employment related type of claims.
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