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Inside MBS & ABS

August 11, 2006

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Commercial MBS Issuance Climbs in Second Quarter, Outlook Positive for Rest of 2006

Commercial mortgage-backed securities issuance rose in the second quarter of 2006, rebounding from a slowdown early this year following the record production level reached at the end of 2005. Ad-ditionally, commercial real estate defaults are down and analysts predict continued positive perform-ance for the rest of the year, except in New Orleans. CMBS issuance hit $53.2 billion in the second quarter, up 18 percent from the first three months... Read More

Morgan Stanley Steps up Mortgage Presence With Purchase of Saxon Mortgage Non-conforming Shop

Wall Street’s foray into the mortgage origination business continued in earnest this week, as Morgan Stanley announced plans to purchase Virginia-based non-conforming loan specialist Saxon Mortgage. “The transaction supports Morgan Stanley’s strategy of building a global, vertically integrated residential mortgage business,” the investment bank said in a statement announcing the $760 million deal. “Saxon adds a premier servicing operation with a scalable U.S. origination platform to [our] ex-isting residential mortgage franchise... Read More

Fannie Mae Content to Use Existing Firepower in MBS Market, More Accounting Issues Identified

Fannie Mae this week reported that it won’t ask its regulator for permission to grow its MBS holdings for the foreseeable future, but that it has made major strides toward achieving the timely fi-nancial reporting that would free the government-sponsored enterprise of portfolio restraints. Fannie’s regulatory settlement with the Office of Federal Housing Enterprise Oversight earlier this year featured a commitment not to grow its massive MBS portfolio until the GSE gets its reporting in order... Read More

Market Effects of GSE Portfolio Caps Debated, But MBS Participation Likely to be Considerable

Most observers don’t expect the portfolio restraints recently imposed on Fannie Mae and Freddie Mac will have a major impact on the MBS market. Both Fannie and Freddie have reached agreements with the Office of Federal Housing Enterprise Oversight to restrain growth in their retained portfolios until they become current in their financial re-porting. Not growing doesn’t mean not buying, however, as both companies experience a substantial... Read More

ASF Releases Rating Agency Reform Framework That’s ‘Consistent’ with Pending Legislation

Efforts to improve government oversight of the credit rating business are getting support from the securities industry, although some of the major ratings services say they have some qualms about legislation pending in Congress. The American Securitization Forum says it does not yet have a definitive position on the credit rating reform legislation, which is designed to increase competition and transparency in the rating busi-ness. But the ASF said its recently... Read More

Mortgage Lenders Continue to Dominate Ranking of Top MBS Issuers in 2006

Although Wall Street has been moving aggressively into wholesale mortgage lending and servicing in recent months, the mortgage securitization business continues to be dominated by large lenders, according to a new ranking and analysis based on the Inside Mortgage Finance MBS Database. Four of the top five MBS producers during the first half of 2006 were major mortgage banking operations, with Lehman Brothers representing... Read More

SEC ‘Telephone’ Guidance Clears Up Thorny Reg. AB Servicing Issues, Focus Shifts to Counterparties

In what has become the securitization market’s version of the never-ending story, the Securities and Exchange Commission has cleared up some lingering issues related to its complex Regulation AB disclosure scheme. But the clarity on some thorny issues has cleared the plate for the industry to ask for more guidance on other topics. Issued in December of 2004, Reg. AB created a complex new disclosure regime for securitization sponsors... Read More

Proposed SMART Stamp System Will Improve Ratings Transparency, Fitch Says

Fitch Ratings is seeking industry feedback on a plan to tighten its ratings surveillance through a new system that will provide investors with a fast source of information on its monthly reviews. Dubbed Surveillance, Metrics Analytics, Research and Tools Stamps, or SMART Stamps, the new system, “should give evidence to the investor community that Fitch is actively monitoring each deal on a continuous basis,” the rating service said, noting that the frequency... Read More

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