Moody’s Investors Service and Fitch Ratings have downgraded the senior unsecured and issuer default ratings of The McGraw-Hill Companies, parent of Standard & Poor’s, to below A-level ratings with a negative outlook. The downgrades are largely due to the Department of Justice’s recent lawsuit regarding ratings of collateralized-debt obligations and rating models for non-agency MBS. “The Baa2 rating balances the company’s history of prevailing in its legal defenses against the potentially substantial negative credit effects that could result from adverse litigation or settlement outcomes,” Moody’s said after downgrading McGraw-Hill’s senior unsecured rating from A3 late last week. “In addition, the management focus and direct costs involved in defending litigation may be a persistent drag on the company’s operations over the intermediate term.” Moody’s said...
Sellers of jumbo whole loans into the secondary market are getting prices of up to 103 – and in some cases more – which on paper might throw a monkey wrench into the economics of trying to create a new MBS, but it’s not turning out that way. According to loan traders and industry consultants, MBS spreads to Treasuries have tightened over the past several weeks, making the economics of issuing a security better, even though the price for the underlying product might look a bit rich for potential issuers. “The cost of funds are going down,” said one trader. According to Craig Cole, a principal in Emerald Consulting LLC, the price paid...
The Department of Justice and the Securities and Exchange Commission are likely to pursue more mortgage-related lawsuits due to pressure from Congress, according to former federal attorneys. “The fact that the attorney general now speaks of financial fraud enforcement as one of the top three priorities of the Department of Justice, just after terrorism and keeping people safe in their communities, trickles down to the lowest levels of the department and elsewhere in terms of the dedication of resources, the coordination, the training, the case referrals,” said Andrew Schilling, a partner at the law firm of BuckleySandler and a former chief of the civil division of the U.S. Attorney’s Office for the Southern District of New York. The latest pressure came...
Look for the Senate Banking, Housing and Urban Affairs Committee under a Democrat majority to focus over the next two years on assuring a smooth implementation of the Dodd-Frank Act, stabilizing the housing market and building a “bipartisan consensus” on housing finance reform, according to the committee’s chairman. “From protecting consumers and taxpayers from Wall Street abuses, to providing the Federal Housing Administration with additional tools to manage its finances while continuing to serve American families, I believe we can find common ground,” said Sen. Tim Johnson, D-SD, chairman. The committee will continue...
The Consumer Financial Protection Bureau may run into budget pressures as it transitions from its start-up and rulemaking period to supervision and enforcement, all while policymakers struggle with spending restraints and Congressional Republicans continue to sharpen their CFPB axes in light of the Noel Canning v. National Labor Relations Board ruling, according to an industry consultant. If the bureau does need more funding, it might find its influence unexpectedly limited. The D.C. Circuit Court of Appeals’ Jan. 25 decision in Canning raises...
PowerLink Settlement, a service provider and appraisal management joint venture controlled by Fidelity National Financial and Homeward Residential, is shutting its doors.
RSS