The performance of closed-end second-lien mortgages has devolved to the point where they are "basically a writeoff," according to Standard & Poor's managing director Susan Barnes. Speaking at the Mortgage Bankers Association's National Secondary Market Conference in Boston, Ms. Barnes said closed-end seconds are "performing horribly" but that home equity lines of credit are "better" because they are typically originated by banks, which have stronger relationships with borrowers. S&P recently stopped rating seconds, saying it might resume at some point if it were able to get a sense that the asset class's performance had become predictable again. The rating agency can be found online at http://www.standardandpoors.com.
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