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Inside MBS & ABS

October 16, 2009

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Agency Officials Brace for Another Tough Year in 2010 as Uncertainties Abound

The cleanup of the housing meltdown will likely dominate the mortgage industry again in 2010, a year that could see major transformation in the role of securitization in housing finance.Secondary mortgage market leaders at the Mortgage Bankers Association annual convention in San Diego this week were subdued about the prospects for the new year. Although a lot of progress... Read More

Re-Securitization Activity Slowed in Third Quarter; JPMorgan Was Most Active Player

The third quarter of 2009 ranked as one of the best three-month periods on record for new issuance of non-agency MBS backed by tranches from existing securities, but volume was down sharply from the second quarter. A total of $12.60 billion on non-agency MBS were issued during the third quarter, down 52.3 percent from the previous period. That brought year-to-date... [Includes four charts] Read More

Industry Groups Call for Regulatory Relief From Proposed FASB-Inspired Changes to Capital

With the accounting and regulatory capital treatment of hundreds of billions of dollars of MBS, ABS and other assets at stake, industry trade groups have asked federal banking regulators for relief from some significant changes to bank capital requirements that are being considered in light of major accounting standards set to kick in at the start of the year. On Sept. 15, the Federal... Read More

Most Performing Borrowers Underwater, Weakness To Continue Through Mid-2010, Reports Say

Up to 60 percent of borrowers with loans backing 2006- and 2007-vintage non-agency MBS – including those still making payments – are underwater due to severely depressed home prices, according to a report published by Fitch Ratings this week. This overwhelming cloud of negative equity is hampering sustained improvement in MBS performance, Fitch noted. “Negative equity reduces a... Read More

SEC to Scrub Ratings References Off Rules, Forms, Defers Action on Some Provisions for More Comment

The Securities and Exchange Commission next month will begin purging its rules and forms of all mention of credit ratings issued by nationally recognized statistical rating organizations in an effort to restore confidence in the ratings system and to strengthen oversight of the credit rating industry. The SEC last week adopted a final rule that will implement the change effective... Read More

ASF Highlights Problems with Recent Tax Structure Changes to REMICs

The American Securitization Forum raised a number of concerns with new tax regulations recently issued by the Internal Revenue Service designed to enhance servicer flexibility in dealing with loans backing commercial MBS that are structured as real estate mortgage investment conduits. The industry group flagged a potentially serious consequence of one of the new provisions regarding the... Read More

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