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

Spreads Vary Between Two Freddie Risk-Sharing Deals

– The deal with a higher average loan-to-value ratio had two tranches price 25 basis points wider.

Navistar Taps ABS Market for Dealer Inventory Financing

– Commercial vehicle maker Navistar plans a securitization of dealer inventory receivables; the $211 million senior tranche is rated 'AAA' by DBRS.

Players Move in on Small Balance Commercial Loan Securitization

– ReadyCap Commercial has completed its first securitization of small balance commercial mortgage loans; and Colony Financial is marketing $220 million of senior securities backed by the asset class.

Citigroup Preps $207.6M Prime RMBS

– Some 71.7% of the loan pool behind Citigroup Mortgage Loan Trust 2014-J2 consists of qualified mortgages (QM). The other 28.3% are not subject to QM.

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Featured Articles

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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