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Inside MBS & ABS

March 27, 2009

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Legacy Securities Plan Seen as Likely to Be Most Successful Part of ‘Toxic Asset’ Clean-Up Program

The “toxic” asset clean-up plan announced this week by the Obama administration includes separate programs for legacy loans and securities, with the latter expected to be more successful, mostly due to the more dramatic pricing disparities that exist in the market for loans, analysts think. “The securities program has a much greater likelihood of working than the loan program, largely... Read More

Banks May Be Likely Sellers of Unwanted MBS Under New ‘Legacy’ Asset Programs

Banks and thrifts had some $409.3 billion of non-agency MBS and non-mortgage ABS on their books at the end of 2008 – assets that many institutions may opt to get rid of under the government’s newly announced Public-Private Investment Program. In fact, insured depository institutions have been dumping these assets already – their combined... [Includes one chart] Read More

Mortgage Bankers Urge ASF to Aim for Broader Industry Participation in Ambitious Project ReSTART

The Mortgage Bankers Association continued to object to Wall Street’s apparently stern approach to restarting the ailing mortgage securitization market and imposing its proposed disclosure and reporting standards on the mortgage industry. In a March 24 letter to the American Securitization Forum, the MBA lauded ASF efforts to restore confidence and address systemic... Read More

Mortgage Securitization Rates Climb to Record High in Distressed 2008 Market

As battered as the mortgage securities market was in 2008, it accounted for a record 79.3 percent of new home loan originations in the U.S., according to a new analysis by Inside MBS & ABS. Of the $1.485 trillion in new single-family mortgages originated last year, $1.177 trillion were packaged in mortgage securities and sold to investors around... [Includes one chart] Read More

Fitch Revises Loss Estimates for Prime MBS Deals as Delinquencies Continue to Rise

Declining home values, lack of mortgage financing and rising unemployment have caused delinquencies to rise dramatically for prime MBS transactions, raising Fitch Ratings’ loss expectations for 2005-2007 vintage prime pools. As part of an ongoing monitoring of MBS transactions, Fitch has placed prime pools from all vintages on review over the last few weeks for possible downgrade or placement... Read More

S&P Suggests Regulatory Framework for Credit Rating Agencies … Including Itself

Restoring confidence in the MBS and ABS market will require that all participants take stock of what has happened and adopt workable solutions, according to a new Standard & Poor’s report. S&P acknowledged that “ a number of the assumptions credit rating agencies used between 2005 and 2007 in rating structured finance bonds backed by subprime mortgages have not held up.” The rating... Read More

Freddie Mac Unveils New Securitization Format to Recycle REMIC Classes

Freddie Mac this week announced a new Reverse REMIC Giant PC program that is designed to help bolster liquidity in the market for certain existing REMIC deals. Under the new program, a portion of outstanding classes from a Freddie REMIC can be re-combined into a new pass-through class that can be used as collateral for a new Freddie Giant MBS. That new Giant... Read More

Skeptics Question Creation of Systemic Risk Regulator as Obama Unveils Reform Principles

The Obama administration offered its most detailed proposal for overhaul of financial services regulation this week that features tougher capital standards and increased oversight of the derivatives market and private investment funds – even as critics question ambitious plans to expand the government’s role in the market. Treasury Secretary Timothy Geithner outlined five principles that... Read More

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