Sign up today and take advantage of member-only content — the kind of timely, cutting edge industry insight that only Structured Finance News can deliver.
FREE site registration entitles you to:
Exclusive Online Only Content
Structured Finance Weekly Recap and ASR Europe, our free email alerts
Industry White Papers
Expert Blogs
November 24, 2008 - Moody's Investors Service's recent lowering of Ambac and MBIAs' ratings to 'Baa1' spurred a massive flow of downgrades. The European CMBS sector has been especially hard hit. It saw downgrades from all three rating agencies over the past week.
November 24, 2008 - Mortgage volume was running substantially below normal through midweek with spreads steadily widening despite buying support from money managers, hedge funds, banks and the U.S. Department of the Treasury. Factoring into the poor performance was CMBS widening as a result of the probability that two JPMorgan commercial loans originated last year were likely to default. This added to investor concerns over the financial crisis extending into another sector. Since the economic slowdown affects consumer spending, this is expected to, in turn, impact hotels, offices and shopping malls.
November 24, 2008 - Bank of America Corp.'s plan to modify 400,000 mortgages is proving to be more complicated than expected - and not only because there are third-party investors involved. The Charlotte company's deal with the attorneys general of 15 states to settle allegations of predatory lending by its Countrywide Financial Corp. did not address what should be done when a borrower has a second mortgage.
November 24, 2008 - The Securities and Exchange Commission (SEC) last Wednesday delayed a resolution on adopting rules that related to the regulation of credit rating agencies. The Commission will return to the issue on Dec. 3. Back in October 2006, President George W. Bush signed the Credit Rating Agency Reform Act of 2006 (CRARA) into law. This made substantial changes intended to revamp the rating agency business model. The law puts the SEC in charge of issuing rules regarding registered credit rating agencies' conflicts of interest and the misuse of public information.
November 24, 2008 - Even in the current Era of Large Numbers, the third quarter 'earnings' reports for Fannie Mae and Freddie Mac were shockingly bad. The two firms combined have lost a total of $54.2 billion dollars. The bulk of the losses ($17 billion for Fannie alone) were attributable to writing-off deferred tax assets, but the GSEs also reported huge increases in 'credit-related expenses.'
November 17, 2008 - With economic conditions worsening, the U.S. government has stepped up its bailout efforts - doling out $250 billion allotted under the Emergency Economic Stabilization Act (EESA) for equity investments in financial institutions. U.S. Treasury Secretary Henry Paulson last week formally shelved the government's plan to use the Troubled Assets Relief Program (TARP), which is part of the $700 billion EESA, to buy troubled assets from banks. Instead, the Treasury has chosen the equity stake route for financial institutions and will focus more on the consumer, attempting to increase the availability of student loans, credit cards and auto loans. It will also encourage private sector involvement by potentially matching private capital with government investments.
November 17, 2008 - The new Spanish government fund Fondo de Adquisicion de Activos Financieros (FAAF) will start operations this week. The fund is intended to strengthen domestic bank liquidity through asset purchases, with Cedulas or Spanish covered bonds playing the leading role. 'FAAF is intended to strengthen the liquidity of Spanish financial institutions through asset purchases, in order to stabilize the supply of credit to the private sector and to Spanish companies, which [have been] hard hit by the economic downturn,' Dresdner Kleinwort analysts said. 'It is not a refuge for nonperforming securities, however, but only accepts highly rated papers. Cedulas will play the leading role in this respect.'
November 17, 2008 - The Spanish government announced the launch of a mortgage deferral measure to aid unemployed, old-age pensioners and self-employed borrowers struggling to pay their mortgages. Although the move could potentially bailout a significant number of struggling homeowners, there could be a potential downside for existing Spanish RMBS deals. 'If we assume that the reported government estimates of 500,000 borrowers end up using the scheme and they all defer the maximum >500 ($625) a month from day one, the total guaranteed deferred payments would amount to >6 billion or some 2.2% of Spanish GDP over two years,' Deutsche Bank analysts said.
November 17, 2008 - Aggressive rate cuts over the past week - the Bank of England's (BofE) 150 basis points easing along with the European Central Bank's 50 basis points cut - are likely to improve loan affordability in existing household credit. However, the cuts might not be enough to curb the downward cycle in highly levered European housing markets, experts said.
November 17, 2008 - Through midweek last week, mortgages experienced modest two-way flows and a less supportive tone versus the first week of November. Heavy and widespread buying - pushed by the improvement in Libor and dollar rolls - had Barclays Capital's MBS Index outperforming Treasurys by 89 basis points through Nov. 7. This, in turn, has made investors more cautious about protecting their gains in the current financial environment.
November 17, 2008 - The Federal Housing Finance Agency (FHFA) announced a new streamlined loan modification program last Tuesday. Loans that will come under the program include those of high-risk borrowers who have missed three payments or more, occupy their residence, and have not filed for bankruptcy.
November 17, 2008 - The ABS market suffered yet another week of frozen new issuance and paltry trading activity in the secondary market. Hopes of pricing clarity for illiquid assets were quashed when Treasury Secretary Henry Paulson made the announcement that he would not be implementing the troubled asset purchase program as previously expected. On news of the announcement, the ABX-HE-AAA 07-2 dropped to close Wednesday at 36.67, a record low for the index.
November 17, 2008 - Resecuritizations or ReREMICs are following the trajectory of the ABS market pretty closely. ABS participants initially turned to this structure because it was a path to market liquidity. It was good way for dealers to try to move inventory around. In fact, in October, there were a few ReREMICs that came to market, most of which were driven by liquidity needs. However - since they are still part of the volatile market that we are all experiencing - sources said that bid lists for these transactions have been revised daily as a result of pricing and supply considerations. For now, the market for these deals has dried up.
November 10, 2008 - With the massive number of bad loans that servicers are being bombarded with, these companies are faced with seemingly insurmountable capacity, legal and tax issues. Can they handle the onslaught?
November 10, 2008 - The wait and focus on the Presidential election kept volume below normal on Monday and Tuesday of last week. The tone, however, was decidedly supportive on the significant improvement in Libor, which led to a strengthening in dollar rolls. Over the two days, money managers were reportedly two-way and primarily focused in 5.5s and 6s, while Asian investors were better - albeit light - buyers. While hedge funds were better sellers on Monday, they turned into buyers on Tuesday.
|
©2008 Structured Finance News and SourceMedia, Inc. All rights reserved. |
|
