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News

HAMP Feb Report Released by Treasury and HUD

The Treasury Department and the HUD today released February data for the HAMP.

FDIC Said to be Prepping Sale of $3 Billion of AmTrust Bank Loans

The Federal Deposit Insurance Corp. is reportedly preparing to sell $3 billion worth of loans from AmTrust Bank.

ResCap on the Block?

GMAC has hired Goldman Sachs to start the process of selling the company's money-losing mortgage unit ResCap.

GMAC Plans to Correct RMBS Servicing Practice by April

GMAC Mortgage's corrective actions related to an unusual servicing practice that could hurt ratings on nearly $6 billion of RMBS it services are scheduled for completion by April 1.

Expiring Govt. Programs to Result in Higher RMBS Losses, Fitch Says

Loss severities on distressed RMBS loans will probably increase this year as several key government support programs expire, Fitch Ratings said in a report.

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Articles

Govt. Tries to Solve the Problem Called HAMP

Reports last week surfaced that the Treasury Department is contemplating changes to the Home Affordable Modification Program (HAMP), which has been widely criticized for being ineffective. There are several changes to the program that the Treasury is looking at, according to a document obtained by American Banker, ASR's sister publication.

Handle with Care: Securitization's Survival a Balancing Act

With the boxes stacked up against the securitization market’s survival, industry players have to play a careful balancing act: How to make the case for the future but still survive in the current hostile environment?

Greek Tragedy Cools Europe's Restart

Sovereign risk" are the words driving pricing in the European securitization market as the troubles in Greece unfold. After a brief period characterized by healthier spreads and a budding primary pipeline, European securitizations are bracing for the impact of Greece's fallout on the whole of Europe.

The GSEs and the Revised Accounting Standards

The analysis of the changes in the GSEs' delinquent loan buyout policies focused on their impact on prepayment speeds and coupon swaps. An underlying notion was that the implementation of FAS 166 and 167 by Fannie Mae and Freddie Mac, which took place effective at the beginning of 2010, paved the way for the announcement; since the loans are now carried on their books at fair value, buyouts no longer have any affect on the GSEs' income statements. However, adopting the new accounting rules required the consolidation of massive amounts of MBS trust assets and liabilities onto the GSEs' balance sheets. The consolidation will in turn have a significant impact on their financial statements, and arguably was a significant factor in the Treasury's Dec. 24 announcement of unlimited support for the GSEs. Along with the prospect of continued operating losses, these changes will eventually impact the upcoming debates on housing, the federal budget and the future of the GSEs.

The Search for Alternatives

With new accounting rules, regulatory uncertainty, and wary investors making ABS uneconomical for issuers, pockets of the securitization market are paralyzed. Participants are forced to look at alternative funding sources, which Nora Colomer explores in this month's cover story. Solutions range from originators resorting to more club-like deals, where risk can be shared, to banks selling portfolios of whole loans to each other. However, nothing can replace securitization as the most effective way to promote mortgage growth and, at the same time, provide an efficient way for companies to shift risk.

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