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Inside MBS & ABS

January 15, 2010

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Coming Off Banner Year, Agency MBS Market Faces Major Changes in 2010

The agency MBS market – the only game of any consequence in mortgage securitization over the past two years – will need to tap extensive new investor demand in 2010 at the same time national policymakers begin to plot a different approach to securing credit for the U.S. housing market. Early indicators suggest that the Federal Reserve is sticking... [Includes two charts] Read More

FDIC Safe Harbor Transition Period Needs to Be Longer so Industry Can Adjust, ASF Says

The securitization industry needs significantly more time to prepare for sweeping changes proposed by the Federal Deposit Insurance Corp. to its safe-harbor rules governing assets securitized by banks in receivership, the American Securitization Forum said in a recent comment letter. The FDIC tentatively plans to extend its existing safe harbor for investors in MBS and ABS issued... Read More

FDIC’s Proposed Safe Harbor Rule Poses Market Value Risk to MBS/ABS Investors

The Federal Deposit Insurance Corp.’s proposed rulemaking regarding its treatment of assets transferred to securitizations sponsored by banks in receivership could limit the damages the agency would have to pay investors, a recent report from Moody’s Investors Service said. The FDIC’s advanced notice of proposed rulemaking featured a draft scheme that would require compensation paid to... Read More

Decline of Monoline Insurers Can Either be a Boon Or a Bane to IP Securitization Investors, Says S&P

Apparent over-reliance on monoline insurers is having a significant adverse impact on ratings on corporate and intellectual property securitizations and exposes these transactions to greater servicer transition risk, according to a new Standard & Poor’s report. Recent downgrades of MBIA, Ambac and other monoline insurers have led to negative ratings actions on a number of... Read More

Alt A Facing Rapidly Rising Defaults, St. Louis Fed Study Finds, But Will it Match Subprime Collapse?

Investors holding MBS backed by Alt A loans could be in for rough sledding, according to new research from the Federal Reserve Bank of St. Louis, which finds the sector facing an escalating rate of defaults echoing the performance of the subprime sector. “High default rates on subprime mortgages marked the onset of the current financial crisis,” said Rajdeep Sengupta... Read More

ASF Spins Off

The American Securitization Forum this week formally separated itself from the Securities Industry and Financial Markets Association, which initially founded the ASF as an independent affiliate. The ASF, which represents investors, issuers, underwriters and other parties in the securitization business, has always been self-funded and self-governed... Read More

Amherst Report: Re-defaults Exceed Modified Loans That Become Current in Non-Agency MBS

Mortgage re-default rates after modifications reached “tragic” levels in November payment data on non-agency MBS, while re-performance rates – payments reverting to less than two months delinquency – were down, according to a new analysis by Amherst Securities Group. The analysis, based on November payment data, focused on “always performers... Read More

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