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Inside MBS & ABS

June 12, 2009

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TALF Becomes Effective Mechanism for Secondary Market, Can Withstand Rough Roadf or CMBS

While the long-awaited government programs to help banks shed “toxic” mortgage assets from their balance sheets increasingly look like they may not happen at all, industry participants are embracing the Federal Reserve’s Term ABS Loan Facility. Speaking at a summit in New York City... Read More

S&P Overhaul of Non-Agency MBS Ratings Would Raise Credit Enhancement Levels Significantly

Standard & Poor’s expects to complete a major overhaul of its ratings methodology for non-agency MBS by the end of July that will substantially raise the cost of issuing new deals. The rating service is shifting to a new approach that starts from an “anchor point” minimum... Read More

Fannie/Freddie Prepayment Speeds Stagnant, Signaling Little Use of GSE Refi Initiatives

The Obama administration’s Home Affordable Refinance Program that creates refinance opportunities for Fannie Mae and Freddie Mac borrowers who have seen their home equity wiped out by falling house prices has so far generated much less volume than analysts expected. Recent... Read More

Government Efforts to Keep Mortgage Rates Low Suddenly Looking Less Effective as Debt Snowballs

Concerns about mounting debt levels in the U.S. are pulling the rug from under the federal government’s efforts to keep mortgage rates low by pumping over a trillion dollars of liquidity into the agency MBS market, a plan that sparked a refinance boom when it was announced late last... Read More

MBS Fund Advisor Agrees to Settle SEC Charges of Overvaluation, Tipping Off Select Shareholders

The Securities and Exchange Commission has agreed to a $40 million settlement offer by a Boston-based investment adviser and affiliate accused of overstating the value of a mutual fund that invested primarily in MBS. In addition to inflating the fund's value... Read More

CMBS Face Major Downgrade Risk, Increasing Downward Movement Due to Economy, Ratings

Concern about the performance of business in the commercial MBS market has begun to become reality in 2009, as the sector’s struggles are pairing with a rough economy and major ratings changes that could devastate a great deal of outstanding CMBS. Standard and Poor's last... Read More

Patent Approved for New MBS Valuation Technology, Model's Speed Faster than Existing Simulation Models

A new prepayment model for valuing MBS pass-throughs, interest-only and principal-only strips, and mortgage servicing rights has been approved for a patent by the U.S. Patent Office. Developed by Andrew Kalotay Associates, a provider of high-precision, high-speed fixed income... Read More

Banks Starting to Repay TARP Funds, But Questions Remain as to How Treasury Will Use the Money

The Department of Treasury announced this week that it had approved 10 recipients of federal assistance under the Troubled Asset Relief Program to repay some $68 billion to the government, but questions remain over what Treasury’s next move will be. Treasury recently met with the... Read More

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