Mortgage banks are supplying Wall Street with better loans to securitize than they did just a few years ago, an analyst at a leading investment bank has found.

Overall, loans securitized in 1992 and 1993 defaulted much less often than those issued in 1990 and 1991, said Peter DiMartino, a mortgage analyst at Salomon Brothers Inc. Mr. DiMartino drew his conclusions after examining nonagency loans issued by six major mortgage banks. The loans were defined as nonagency because they exceeded the maximum set by Fannie Mae and Freddie Mac for securitizations or because they were made to borrowers with tarnished credit records.

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