And as I said, a lot of people don’t understand this mess. You are looking at it the wrong way – the 3A’s credit rating is assigned to the intument, not to a company or a person. The instrument is called “asset-backed security” or mortgage-backed security. This instument itself holds a risk rating, not the people with mortgages/companies with assets.
Here is a cnn quote that may explain it best:
A bank or brokerage bundles up hundreds of mortgages and sells investors debt that is backed by mortgage payments and secured with homes. These asset-backed securities – ABS’s, in Street parlance – are sold in slices, each of which carries its own theoretical level of risk, ranging from the supposedly invulnerable (AAA) all the way down to the bottom rung of investment grade and even past that, to a highly speculative unrated slice.
It’s possible to create a AAA-rated asset out of somewhat shaky collateral, because the first dollar of income goes to the securities with the highest rating, while the first dollar of loss is assigned to those with the lowest. The bottom layers provide a cushion that supposedly protects the higher-rated securities.
I.e. you will likely see money from those borrowers who have bad credit but pay their mortgage payment.