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Inside MBS & ABS

March 31, 2011

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Regulators Offer Variety of Options in Risk-Retention 
Proposal, Outline New ‘Premium Capture’ Fund

Federal regulators offered asset securitizers a wide array of potential structures for meeting new risk-retention standards in a long-awaited proposed rule issued this week. As expected, the proposed rule would exempt ABS backed by assets guaranteed by the federal government or state and local entities from a new requirement that issuers retain a 5 percent interest in the transaction that was mandated by... Read More

‘Extremely Rigid’ QRM Rule Would Keep U.S.
 Entrenched in Market, Private Capital Sidelined

The new interagency risk-retention proposed rule that was released this week will maintain the federal government’s stranglehold on the nation’s residential mortgage market, discourage private capital from getting back into the game, further depress home prices across the country and constrain housing finance for first-time homebuyers, according to some securitization experts and analysts. The proposal would... Read More

Ally’s $1.25 Billion Excess Servicing Deal Causes 
Optimistic Rumblings in Dormant MSR Market

A new mortgage excess servicing deal priced by Ally Financial, Inc. last week has brought new excitement to a market that saw only five deals in the last two years, prompting analysts to predict a resurgence in excess servicing securitizations. Ally will sell $1.25 billion in bonds backed by excess mortgage servicing rights, allowing it to significantly reduce its robust mortgage servicing portfolio. Ally is one of the large banks currently... Read More

House GOP Introduces GSE Legislation 
With Markup Scheduled for Next Week

Republican members of the House Financial Services Committee the week introduced eight separate bills aimed at scaling back the government-sponsored enterprises or tightening their oversight. The House Financial Services Subcommittee on Capital Markets and GSEs held a hearing on the eight bills and plans a markup on April 5. “The GSE Credit Risk Equitable Treatment Act,” introduced by Rep. Scott Garrett, R-NJ, chairman of the subcommittee, would... Read More

Standard & Poor’s Ranked as Top Rating Service for
 Non-Mortgage ABS and Non-Agency MBS in 2010

Standard & Poor’s maintained its ranking as the top rating service in the MBS and ABS market in 2010, according to a new Inside MBS & ABS ranking and analysis. S&P rated 78 percent of the non-agency MBS issued last year, up sharply from its 51 percent share back in 2009. While total non-agency MBS production rose by just 5 percent in 2010, S&P’s business increased 63 percent, the largest increase in... [Includes one data chart] Read More

Rough Economy, Growing Inventory Create More
 Moral Hazard in Use of Foreclosure Alternatives

With the glut of foreclosures in the pipeline and more loans falling underwater, servicers, regulators and attorneys general trying to reach a servicing settlement are having a hard time finding solutions that are acceptable to all sides. Cash for keys, for example – a strategy in which the borrower is given a monetary incentive to vacate the home – is no longer considered a particularly viable option. In fact, Sheila Bair, chairman of the Federal Deposit Insurance Corp., recently brought up the idea during a meeting with servicers, suggesting that... Read More

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