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Inside MBS & ABS

June 4, 2010

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After Two Years of Waiting, Distressed Asset Buyers Finally See Banks Putting Troubled Loans Up for Sale

Ever since the housing bubble burst in many areas of the country more than two years ago, a small army of private-equity firms, hedge funds and other investors have been raising hundreds of billion dollars to capitalize on the opportunity to buy distressed mortgage assets at a steep discount. But most of the money has sat on the sidelines as there has been relatively little in the way of... Read More

Agency MBS Production Slows in May as Market Falls Further Behind Issuance Pace Set in 2009

Neither low mortgage rates nor a seasonal pick-up in housing sales could spur securitization volume in May as total agency MBS issuance slipped 2.2 percent below the prior month’s level, according to a new market analysis and ranking by Inside MBS & ABS. A total of $92.37 billion of agency MBS were issued in May... [Includes one chart and one graph] Read More

Credit Rating Services Prepare Methods to Implement SEC Rule in Effect This Week

The major credit rating agencies this week began implementing a revised Securities and Exchange Commission rule that requires anyone seeking a rating of a structured finance transaction to make available all information provided to the rating service to other ratings firms as well. The revised SEC rule 17g-5 requires “arrangers” of structured finance transactions that hire a... Read More

Non-Agency RMBS Make Up Large Share of PPIP Funds, But More Information Needed, COP Says

The Treasury Department’s Public-Private Investment Program is making headway at generating movement in the residential MBS market through the first eight months of its existence, but a government watchdog says the secondary market still needs more information about the initiative. The PPIP is designed to facilitate price discovery in the MBS markets, allowing banks and other... Read More

Moody’s Concedes Failures in Market’s Implosion, Outlines Changes to Improve its Rating Process

It was the rating services’ turn – and Moody’s Investors Service in particular – to feel the wrath of the Financial Crisis Inquiry Commission, a bipartisan government panel charged with figuring out what went wrong in the financial market meltdown of 2008. “To be blunt, the picture is not pretty,” said FCIC Chairman Phil Angelides. “From 1998 to 2007, Moody’s revenues... Read More

Redwood Officials Don’t Expect Much Company In Jumbo MBS While GSEs Dominate Market

The best thing government policymakers could do to revive the non-agency MBS market would be to begin reducing the conforming loan limit that has given Fannie Mae and Freddie Mac access to a vast swath of the jumbo market, according to officials at Redwood Trust.Although Congress and the Obama administration are still researching options for resolving the... Read More

GSE Regulator Continues to Emphasize Damage Done by Non-Agency MBS

Fannie Mae appears to be doing a better job of managing its toxic non-agency MBS holdings than Freddie Mac, according to the government-sponsored enterprises’ federal regulator. Both GSEs continued to pay a severe financial penalty for their involvement in the subprime and Alt A MBS markets that peaked at $774 billion in mid 2008 but have now withered down to $532 billion... Read More

Wisconsin Appeals Court Rejects Bondholders’ Motion for Injunction in Ambac Rescue Case

A group of investors that own residential MBS lost its bid again this week to stop a proposed settlement agreement between Ambac Assurance Corp. and a group of 17 banks after a Wisconsin appeals court rejected the investors’ motion. The ruling by Judge Paul Higginbotham of the Wisconsin Court of Appeals, District IV, in Sean Dilweg v. Wells Fargo Bank... Read More

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