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Inside MBS & ABS

November 7, 2008

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Non-Mortgage ABS Issuance Slumped in 3Q08, But It’s a Picnic Compared to MBS Sector

Upheaval in world financial markets led to a sharp 34 percent decline in new issuance of non-mortgage ABS during the third quarter – but the ABS market continues to fare much better than the comatose non-agency MBS business. A total of $48.56 billion of non-mortgage ABS were issued during the third quarter, with all three major consumer finance sectors seeing... [Includes three charts] Read More

Loans Pooled in Mortgage Securities May Be Hard To Refinance Through Ambitious FHA Program

The ambitious HOPE for Homeowners program written into this summer’s Housing and Economic Recovery Act of 2008 has already run into more than its share of obstacles, and industry observers say H4H volume could be further constrained by securitization issues. Democrats in Congress crafted the H4H program to allow the FHA to refinance distressed mortgages that exceed the current value of the... Read More

Industry Worries that More Ginnie Mae Curbs on Buyouts Will Hurt Servicers, Impair Loss Mitigation

The mortgage banking sector is worried that further restrictions on loan buyouts and repooling from Ginnie Mae MBS will hit mortgage servicers’ bottom lines and discourage them from loss mitigation efforts. “We are concerned that Ginnie Mae will further restrict buyout and repooling policies. It is doubtful that such changes will materially reduce prepayment speeds, but they could... Read More

No Ratings Cut from RFC Increase of Loan Modification Activity in MBS Pools

Raising the prescribed limit on allowable modifications in securitized transactions sponsored by Residential Funding Co. last month will not result in a ratings downgrade, according to Moody’s Investors Service. Moody’s reassured RFC that it will not lower ratings on 14 MBS trusts solely on the basis of an increase on the amount of loans that can be modified under the pooling and... Read More

Bernanke Offers Roadmap to Planning Future of Mortgage Securitization, GSEs

The collapse of the non-agency MBS market and the government takeover of Fannie Mae and Freddie Mac have made the repair of the mortgage securitization process a major priority for the incoming Obama administration and Congress. Federal Reserve Chairman Ben Bernanke thinks there are some big problems that need to be fixed, but that securitization – or some other way of linking homebuyers... Read More

S&P Says Servicers Focused on Managing Troubled Mortgages in Third Quarter

Subprime mortgage delinquency rates continue to climb as 2008 staggers to a finish, creating more strain on servicers trying to cope with increased workload, according to a new Standard & Poor’s report released this week. Subprime mortgage delinquencies have increased from an average 15 percent of loans in 2006 to nearly 24 percent industry-wide in 2008, S&P said... Read More

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