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Inside MBS & ABS

November 20, 2009

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House Financial Services Committee Tweaks Retained Interest Provisions, Rejects Covered Bond Proposal

The House Financial Services Committee this week approved significant changes to controversial “retained interest” provisions that would rewrite the economics of securitizing home loans and other financial assets as part of a massive overhaul of federal regulation of financial markets. The committee approved by voice vote an amendment offered by Rep. Walt Minnick, D-ID... Read More

Bair Looks Forward to Staff Proposals to Strengthen Safe Harbor for Securitizations

The Federal Deposit Insurance Corp. will soon be considering long-term changes to its securitization safe harbor rule that would ensure unimpeded asset- and mortgage-backed transactions and participations after March 31, 2010. The agency’s board of directors is expecting to consider a “very good set of recommendations and conditions” to be presented by FDIC staff at its December meeting... Read More

Investors Grapple with Potentially ‘Tremendous’ Impact of Federal Loan Modification Programs

MBS investors are stuck in the middle of a difficult balancing act, aware of the need to stop the waves of foreclosures and defaults but struggling to navigate the changing landscape brought by massive mortgage modification efforts. The Obama administration’s Home Affordable Modification Program, under which more than 650,000 trial modifications had been launched through the end of October... Read More

Bank Holdings of MBS Edge Slightly Higher in 3Q09 Despite Decline Among Large Institutions

Commercial banks increased their holdings of mortgage-backed securities during the third quarter of 2009, although the largest institutions actually shed some residential MBS. Commercial banks held some $1.191 trillion of MBS – including agency MBS, non-agency securities and commercial MBS – as of the end of September, according to the Federal Reserve... [Includes one chart] Read More

ASF Proposes Bond Reporting Package To Improve Bond Performance Reviews

The American Securitization Forum is seeking comment on a proposed bond-level reporting package which would standardize trustee reports and provide information to users for a more efficient review of bond performance. The reporting package is a component of the ASF’s Project on Residential Securitization Transparency and Reporting... Read More

Investors Urged to Consider Callable MBS as They Look to Boost Yield in Tight Agency MBS Market

At a time when yield in the agency MBS market is looking dire, investors can whet their appetites on callable MBS, which promise to boost current yield without taking too much risk, according to a new analysis from Barclays Capital. A callable MBS is essentially a long MBS position with a call option sold against it, said Barclays analyst Kumar Velayudham. “It is equivalent to... Read More

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