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Inside MBS & ABS

April 17, 2009

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Securitization Market Cautious About Possible Rule Changes in Obama Legacy Loan Program

Potential investors in the Obama administration’s ambitious Legacy Loan Program may be scared away by the prospect that the government may significantly change the rules of engagement even after transactions settle. The LLP was designed to tackle one of the fundamental problems that has stymied financial markets over the past year by providing a way for banks to sell distressed mortgages... Read More

Agency MBS Issuer Community Becomes More Top-Heavy in Early 2009 Production Deluge

The top three mortgage lenders in the residential market accounted for over half of the agency MBS issued during the first three months of 2009, according to a new Inside MBS & ABS ranking. Wells Fargo issued a total of $75.52 billion of MBS through Fannie Mae, Freddie Mac and Ginnie Mae during the first quarter of this year. That accounted for a whopping 22.1 percent of... [Includes one chart] Read More

Moody’s Expands Review of Jumbo Tranches as DBRS Announces Updated Method for Rating MBS

Moody’s placed 79 more tranches on review for possible downgrade last week as it continued to monitor all MBS transactions backed by prime jumbo mortgages issued from 2005 to 2008. The latest ratings action brings to 5,067 the number of tranches of jumbo MBS that are being evaluated for ratings adjustment. The tranches have an... Read More

Companies Trending Toward More Granular Consumer Information for Securitized Loans

New technology tools will allow residential MBS investors to look deeper into consumer credit and loan-level information, helping to uncover hidden risks. Chicago-based credit bureau TransUnion said Monday that it had partnered with First American CoreLogic to offer a new platform, Consumer Risk Indicators, that can be used in trading whole loans as well as MBS. The system provides... Read More

Government Continues Pressing for Wide-Scale Loan Modification Efforts Despite New Questions

Large mortgage servicers began lining up for federal subsidies to grease the wheels for loan modification efforts that will affect every corner of the MBS market, even as researchers raise new doubts about the likely success of this strategy. Under the Obama administration’s housing recovery plan, any institution that gets aid under the Troubled Asset Relief Program has to consider loan... Read More

Credit Rating Agencies Sound Off On Fixing Broken Ratings System

Fixing its regulation of the credit rating business has nearly become a full-time job for the Securities and Exchange Commission, which had to write regulations for a brand new federal law back in 2006, then hurriedly revised several major rules as the financial markets came unglued. At a roundtable convened by the SEC this week, Chairman Mary Schapiro said the agency must take an... Read More

S&P Highlights Key Criteria for Ratings Firms, Backs Diversity of Business Models in the Market

There is a market need for credit rating services delivered through different business models, according to a new Standard & Poor’s analysis, and with appropriate oversight all can work for investors.“We believe that there is room for several business models in the credit rating industry. Although each business model presents its own potential conflicts, we believe that appropriate regulatory... Read More

Markets Find New Life for Underperforming MBS in Redesigned Re-REMIC Structures

Previously highly-rated investment securities that were downgraded can be re-created as truly AAA through a “re-REMIC” structure by providing more credit support, according to a new analysis by Amherst Securities Group. Properly structured re-REMICs can ease much of the price pressures resulting from the chaos in the MBS markets by reallocating the cash flows of... [Includes one chart] Read More

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