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Inside MBS & ABS

October 2, 2009

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MBS Issuance Continues Slowing Down As Third Quarter 2009 Draws to a Close

Mortgage securitization activity dropped for the third consecutive month in September, leaving third-quarter issuance levels off 25 percent from the huge production levels set in the previous quarter.A total of $458.67 billion of residential MBS were issued during the third quarter of 2009, according to a new analysis by Inside MBS & ABS. Although that represented... [Includes one chart and one graph] Read More

Two Firms Close PPIP Funds as U.S. Moves Closer To Launch of Legacy MBS Acquisition Program

Two of the nine investment fund managers chosen to participate in the government’s long-awaited program to provide liquidity to the non-agency MBS market reached their initial target levels of $500 million in private capital raised for the program. Invesco Ltd. and the TCW Group both completed their initial closings for the Legacy Securities Program, a component of the... Read More

NRSROs Caution Against Increased Liability As Congress Considers Rating Agency Reforms

Proposals to increase oversight and liability of nationally recognized statistical rating organizations are problematic and would bring unintended harm to the markets, warned representatives of major credit rating firms this week. Testifying in a hearing called by the House Financial Services Subcommittee on Capital Markets, Insurance, and Government-Sponsored Enterprises, top NRSRO... Read More

Life Insurance Firms Seek Relief as Slumping Non-Agency MBS Push Capital Requirements Higher

The U.S. life insurance industry, which held $145 billion in non-agency residential MBS at the end of last year, is continuing to call for regulatory relief from the surging capital requirements it is confronting in the wake of sustained ratings downgrades. The industry says its capital requirements have leapt five-fold to $11 billion in the first six months of the year as a result of the... Read More

Agency REMIC Production Gains Momentum In 3Q09; Goldman Leads in Underwriting

Issuance of real estate mortgage investment conduits backed by agency MBS picked up smartly in the third quarter, with $91.28 billion in total issuance for the period. That was up 29 percent from the second quarter at a time when overall agency MBS issuance was dropping by 23 percent. During the three months ending in September, agency REMIC production equaled... [Includes two charts] Read More

Accounting Changes Could Dampen Securitization and Challenge the GSEs

The forthcoming implementation of some key accounting changes is expected to have substantial and wide-ranging effects on the secondary mortgage market and the financial institutions that participate in it, including dampening interest in securitization overall, making the non-agency sector even less attractive, and presenting some serious operational challenges for Fannie Mae and... Read More

Basel Report Recommends Stronger Risk Management by Firms Issuing and Investing in Special-Purpose Entities

Special-purpose entities, structures that are widely used in the MBS and ABS market, aren’t intrinsically bad, but poor management practices and a lack of transparency led to significant problems during the financial market meltdown, according to a new report on SPEs released this week by the Basel Committee on Banking Supervision. “It must be emphasized that the usage of SPE structures is... Read More

ASF, S&P Launch Numerical Coding System for Securitized Loans as Part of Project RESTART

The American Securitization Forum and Standard & Poor’s Fixed Income Risk Management Services last week launched their new standardized universal code for identifying information about individual loans that are pooled in MBS and ABS. The code is an important component of the ASF’s Project RESTART, the group’s initiative to improve the securitization process and reshape how information and data are... Read More

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