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Inside MBS & ABS

May 7, 2010

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Corker Introduces Amendment to Eliminate Risk-Retention Requirement from Senate Bill

As debate on amendments to the Senate regulatory reform bill began this week, the eyes of the mortgage industry turned to a proposal by Sen. Bob Corker, R-TN, to strike legislation requiring lenders to retain at least 5 percent of a mortgage sold into the securitization market. The clash over risk retention is expected to be one of the major fights to watch as lenders... Read More

Agency MBS Issuance Picks Up Modestly In April, But 2010 Still Trailing Last Year

New production of agency MBS in April 2010 increased by 2.4 percent over the anemic volume generated during the previous month, but the market continued to fall well behind the pace set in 2009. According to the Inside Mortgage Finance MBS Database, a total of $91.35 billion of agency MBS were issued last month. That still marked the second-lowest... [Includes one chart and one graph] Read More

Foreign Investors Held Onto Agency MBS as They Dumped Non-agency MBS and ABS Investment

Foreign investors reduced their holdings of U.S. mortgage securities and ABS by 17.7 percent during the 12 months that ended in June 2009, but they remained fairly loyal investors in agency MBS. New final data recently released by the Treasury Department show that foreign investors held some $1.260 trillion of MBS and ABS issued by U.S. securitizers... [Includes one chart] Read More

GSE Hedging Strategies Could be Compromised Under Derivatives Amendment to Reg Reform

An amendment to the Senate’s regulatory reform bill being voted on this week could have the effect of excluding Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks from the $605 trillion privately negotiated derivatives market they tap to help manage their interest-rate exposure. Such a development could severely constrain the hedging strategies of the government-sponsored... Read More

On Top of Mortgage Originations, Wells Fargo Expands Securitization Platform

The largest mortgage lender in the market, Wells Fargo, announced that it has recently expanded its residential MBS platform, and the bank plans to take on a greater role in the secondary market. Wells said its residential MBS group will now provide a full suite of advisory, structuring, research, distribution, and trading services to investing clients and Wells Fargo Home Mortgage... Read More

S&P Revises Ratings Methodology for Seasoned Loans In RMBS to Adjust Reps & Warranties, Loan Mods

Standard & Poor’s is refining its methodology for reviewing seasoned loans in residential MBS transactions, a potential source of new non-agency MBS issuance. S&P said the performance of mortgages may reflect the quality of a lender’s origination and underwriting process, but the company also believes that as a loan seasons, its performance may become a... Read More

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