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Inside MBS & ABS

December 5, 2008

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SEC Drops Plan to Require Special Designations On Ratings of Structured Finance Transactions

The Securities and Exchange Commission this week approved a final rule on the credit rating business that includes major provisions from a proposal the agency aired in June, but officials opted not to move forward with a controversial plan requiring special rating symbols for MBS and ABS. The mortgage- and asset-securitization industries widely opposed the SEC’s original plan that... Read More

Fed/Treasury Bid to Become Major MBS Investors Sends Mortgage Rates Tumbling – More Plans in the Works

Last week’s bold announcement by the Federal Reserve that it will buy $500 billion of agency MBS had a huge impact on spreads and primary market mortgage rates even before the agency reached for its checkbook – and the government is drawing up new plans designed to push rates even lower. The Fed’s pledge to purchase $500 billion in agency MBS “is a game changer” that “restores the... Read More

Investors Sue Countrywide to Compel Repurchase of Modified Mortgages

Institutional investors are suing to force Countrywide Financial Corp. to repurchase mortgage loans it had securitized and sold to trusts before the loans are modified under a settlement agreement with state attorneys general. The class-action lawsuit was filed this week in the New York Supreme Court by the law firm Grais & Ellsworth on behalf of Greenwich Financial Services Distressed... Read More

Collapse of Washington Mutual Leads To Sharp Drop in Thrift MBS Holdings

The thrift industry’s role in the MBS market eroded sharply during the third quarter as some of the biggest institutions in the business were acquired by non-thrift investors or forced into receivership at the Federal Deposit Insurance Corp. According to the Office of Thrift Supervision, savings institutions held some $171.52 billion... [Includes three charts] Read More

Securitization Groups Press to Develop Best Practices, Restore Market Confidence in MBS

Sensing that the securitization industry itself is under threat as a result of the fallout from the collapse of the mortgage market and the credit freeze, industry groups have launched a global initiative to develop industry best practices and to restore investor confidence. “The global securitization industry is firmly committed to developing and implementing practical... Read More

Loan Modifications Have Positive, Negative Effects on RMBS Deals, S&P Study Finds

Despite the potential loss in yield for MBS investors, loan modification has many advantages for bond holders and borrowers, and may actually result in lower collateral losses and protect against future losses. In a strange way, it may also inspire deviant borrower behavior. These are just some of the findings of a newly released Standard & Poor’s study on the impact of... Read More

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