What Risk Retention Means for CMBS, Autos, CLOs

Risky mortgage lending may have triggered the financial crisis, but final risk retention rules go much easier on mortgages than securitizations of other kinds of assets.


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Latest News

Invitation Homes Returns with 3rd Rental Deal of 2014

– The securitization trust is backed by a single, $775.1 million loan secured by mortgages on 4,048 single-family residences with a total value, based on broker price opinions, of $981.8 million, according to a presale report published by Kroll Bond Rating Agency.

Textainer Shopping $200M of Container Lease Backed Securities

– The $200.8 million Textainer Marine Containers III, Series 2014-1 will issue a single tranche of notes with a preliminary ‘A’ rating.

JP Morgan Preps $415M Hotel CMBS

– JP Morgan plans to sell $415 million of commercial mortgage backed securities backed by a two-year, floating-rate commercial mortgage loan that is secured by Courtyard by Marriott hotels.

World Omni, Fifth Third Auto Deals Price

– World Omni and Fifth Third priced nearly $2 billion of securities backed by auto loans on Wednesday.

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Featured Articles

Moody's: Rising Rates Will Reduce Excess Spread for CLOs

– Rising interest rates could reduce an important form of credit enhancement for U.S. collateralized loan obligations, potential putting them at risk for downgrades in their credit ratings, according to Moody’s Investors Service.

Four Key Questions about Risk Retention Rules

– Regulators are finally ready to unveil a final risk retention rule, but whether the new regulation provides enough certainty to jump start the mortgage securitization market is an open question.

Lender Challenge Premise of CFPB's Student Loan Findings

– The student lending industry argues that the problems the CFPB is finding in the market are more related to federal loans than private ones and disagrees with the agency's push to allow student loans to be charged off in bankruptcy,

Student Loan Debtors Need a Light at the End of the Tunnel

– A New Jersey bankruptcy judge argues that Congress should amend the bankruptcy code to permit borrowers to discharge student loan debt if their net monthly income is insufficient.

Nonperforming Residential Mortgages Going Mainstream

– In another sign of strong demand by investors for nonperforming residential mortgages, the asset class is edging closer to more rated, public securitizations — a rarity in this largely opaque market.

The Next Wave of RMBS Litigation

– Rescap Liquidating Trust, the surviving entity from the bankruptcy of Residential Capital, has filed lawsuits against originators of faulty mortgages that it securitized; it could be a bellwether for other loan aggregators.

Unsolicited Ratings Encouraged More in Theory than in Practice

– Which opinion is more reliable: A well-informed one tainted by financial arrangements or one free of such conflicts but based on limited data — and possibly colored by spite?

CMBS Investors Skittish on Regional Mall Exposure

– Another rash of Sears and affiliate Kmart closings are planned, at least six of which will impact existing CMBS deals, either directly because the stores are a part of collateral backing the deals, or indirectly because the closures will damp mall business.

Can JPMorgan Save the Private-Label MBS Market?

– JPMorgan Chase is planning a fourth quarter spurt of mortgage bond sales that would keep afloat the market for securities not guaranteed by Fannie Mae and Freddie Mac.

European CLO Managers Taking a Shine to Volcker Rule

– The Volcker Rule doesn’t apply on their turf, but European CLO managers are nearly as eager to come in line with the regulation as their U.S. counterparts.

Oregon Standoff Shows Difficulties Escaping Trups Trap

– Albina Community Bancorp nearly managed to wriggle out of a trust-preferred vise, but it could still find itself getting squeezed.

Single-Family Rental Giants Branch Out

– Single-family rental giants are financing smaller players, setting the stage for a new wave of issuance.

Judge Sides with Creditors in Trups Bankruptcy Fight

– A judge has ruled that the involuntary bankruptcy of FMB Bancshares in Lakeland, Ga., may proceed, a decision that could embolden more trust-preferred creditors to pursue a similar strategy.

Making Catastrophe Bonds Accessible to Smaller Issuers

– Jardine Lloyd Thomson Capital Markets allows sponsors of catastrophe bonds to piggyback on its Market Re platform, reducing frictional costs. This makes makes it easier for smaller issuers, or those looking offload a specific risk, to access the market.

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Scott McNulla

Vice President of Regulatory Compliance

Firm: Clayton Holdings

In the news: How Ability-to-Repay Rules Could Reshape RMBS Market

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Single-Family Rental Giants Branch Out

Single-family rental giants are financing smaller players, setting the stage for a new wave of issuance.

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