So many homes are up for sale that prices are falling, and holders of mortgage-backed securities are getting hurt. Some 58% of the loans were no-documentation or low-documentation. In this case, Goldman sliced the $494 million of second mortgages into 13 separate tranches. The $336 million of top tranches - named cleverly A-1, A-2, and A-3 - carried the lowest interest rates and the least risk. As we interpret this - the firm declined to elaborate - Goldman made more on its hedges than it lost on its inventory because junk mortgages fell even more sharply than Goldman thought they would. read more