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Inside MBS & ABS

May 29, 2009

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TALF Changes Show ‘Encouraging’ Signs, RMBS Eyed as Next Eligible Collateral on the Horizon

Narrowing spreads, increased investor interest and an uptick in secondary market activity have signaled a positive trend for the New York Federal Reserve’s Term ABS Loan Facility, industry experts said on a conference call hosted by the American Securitization Forum late last week. TALF doles out financing for investors buying newly issued, AAA-rated securities. It was originally... Read More

Freddie Mac Uses Wrap Program to Dial Up Multifamily Securitization Conduit

Freddie Mac this week launched its first multifamily mortgage securitization under its new Capital Markets Execution program, which offers lenders more flexibility in tapping the securities market without the government-sponsored enterprise having to hold the loans in its portfolio. The first transaction under the program was COMM 2009-K3, a $984.85 million multifamily MBS issued... Read More

Dutch Government Helps U.S. Thrift Cleanse Balance Sheet of Damaged Non-Agency MBS

ING Bank FSB, the largest thrift investor in the MBS market, tapped corporate family connections in early 2009 to shed unwanted non-agency MBS from its portfolio so it could bolster its equity position. ING, a U.S. savings bank connected to the Netherlands-based ING Groep, held a hefty $36.02 billion of MBS in its portfolio at the end of 2008. That included some $27.07 billion of non-agency... Read More

Additional Delinquencies and Defaults Anticipated For Recent Ginnie Vintages, More Analysts Say

The latest data and projections indicate continuing trouble up ahead for the more recently securitized FHA product, this time from an analysis by a team at Barclays Capital. “Data suggest that the 2006-08 production Ginnie Mae coupons should continue to default at a fast pace as a result of loose underwriting, weak home price appreciation, and the rising jobless rate,” as well... Read More

Securitization Rate Drifts Lower in 2009 As Conforming Mortgage Pipeline Swells

A slightly lower share of mortgages originated in the first quarter of 2009 found their way through to the securities market despite a heavy focus on agency MBS programs as the dominant form of financing home loans. A new Inside MBS & ABS analysis reveals that 76.2 percent of the estimated $455.0 billion of home mortgages originated in the first three months of this... [Includes one chart] Read More

Police, Firemen Pension Fund Sues IndyMac Trusts, But Recovery of MBS Investment Losses Uncertain

A Detroit pension fund is seeking certification in a class-action lawsuit against a finance subsidiary of IndyMac Bank and 61 IndyMac trusts for allegedly failing to disclose material information that later resulted in significant losses in the fund’s MBS investments. Brought by the Police and Fire Retirement System of the City of Detroit, the lawsuit arises from the sale of an... Read More

Loan Modification Can’t Help All Distressed Borrowers, But Potential Payoff is Worth Pursuing, Fitch Says

Loan modifications will not solve every problem loan, says Fitch Ratings in a new report released this week, but restructuring distressed loans can be successful if it benefits both the borrower and the MBS investor by producing an affordable payment stream that exceeds the return investors might get under other scenarios. Fitch said a loan modification’s success depends on its... Read More

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