Goldman-issued subprime bonds lead downgrades: Citi

(Reuters) - Downgrades are accelerating on mortgage bonds backed by loans to the riskiest borrowers following an ongoing surge in delinquencies and foreclosures. Lenders loosened underwriting standards in the years through 2006, creating loans whose poor quality became apparent as the U.S. housing slump began.




Mortgage bond sales and trading has helped boost profit at Goldman Sachs and other Wall Street banks, who compete for loans from subprime lenders and package them as home equity asset-backed securities for sale to investors.


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