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Inside MBS & ABS

March 6, 2009

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GSE Portfolios Shrink in January; Earnings Point to Ongoing Constraints, New Challenges

Fannie Mae and Freddie Mac pared back their retained portfolio investments in early 2009 as a flood of liquidity poured into the MBS market from the Federal Reserve and the Treasury Department, and new disclosures suggest the government-sponsored enterprises may have little room to grow. Although the Obama administration recently expanded the potential... [Includes one chart] Read More

Obama Administration Releases Details of Loan Modification Plan

The Obama administration’s Home Affordable Modification plan launched this week aims at changing the terms on millions of subprime, Alt A and other distressed mortgages, but it apparently will not disrupt existing pooling and servicing agreements on non-agency MBS. The program establishes a standard approach to loan modifications for a lender’s entire servicing... Read More

GSE Refinance Plans Will Cause Spike in Agency Prepayments

Fannie Mae and Freddie Mac this week launched streamlined refinance initiatives that are part of President Obama’s Homeowner Affordability and Stability Plan that are expected to spur a surge in new agency MBS production and jumps in prepayment speeds. A key component of HASP is the Home Affordable Refinance program through which loans held or securitized... Read More

Fed Launches TALF Program, Treasury Still Working on Troubled Asset Purchase Program

The Federal Reserve this week announced final details for the Term ABS Loan Facility, a widely anticipated program that is expected to help goose the ABS market. In the early stages of TALF, the Federal Reserve Bank of New York will lend up to $200 billion to investors who purchase newly originated AAA-rated securities backed by student loans, credit card... Read More

Cramdown Legislation Still in Limbo As Lawmakers Try to Broaden Support

The House of Representatives late this week is expected to resume work on legislation that includes a bankruptcy cramdown provision encompassing loans held in MBS, as House Democrats are trying to compromise on several of the legislation’s provisions. H.R. 1106, the Helping Families Save Their Homes Act of 2009, is a conglomeration of separate bills on cramdown previously... Read More

GSE Regulator Prepares to Study Securitization Of Mortgages Purchased Under FHLBank AMA

The Federal Housing Finance Agency is asking for public input as it prepares to launch a study on the securitization of conforming residential mortgages purchased by the Federal Home Loan Banks from their members under FHLBank Acquired Member Assets programs. The study is required by the 2008 housing act and it is expected to include policy recommendations based on an analysis... Read More

Initial Discussions Begin in Congress Regarding Systemic Risk Regulation

Lawmakers on Capitol Hill have begun sparring over far-reaching regulatory reform initiatives that could lead to the creation of a systemic risk regulator that would monitor the financial markets and hopefully avert crises such as the meltdown of the past few years. In addition to monitoring systemic risk, the new regulator may be charged with watching over companies that are deemed... Read More

Frank Seeks Prosecution Of Fraud Perpetrators

House Financial Services Committee Chairman Barney Frank will be asking federal securities regulators, as well as federal and state law enforcers, to testify about their plans to prosecute those who had a hand in the financial crisis. In a press briefing on Capitol Hill this week, the Massachusetts Democrat indicated that he wants individuals and financial... Read More

Agency Buying Spree Boosts Bank MBS Holdings Surge in Late 2008

Commercial banks stepped up their holdings of mortgage-backed securities during the fourth quarter of 2008, raising their total stake to a record $1.089 trillion, according to year-end data released by the Federal Deposit Insurance Corp. That represented a 3.9 percent increase in just three months and pushed bank MBS holdings up 12.1 percent... [Includes one chart] Read More

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