WASHINGTON — Twelve Democratic senators have called for a U.S. investigation into any role banks and regulators may have played in the scandal over the London Interbank Offered Rate.

Two Harbors Investment Corp. plans to offer 35,000,000 shares of its common stock in an underwritten public offering to buy more RMBS. The sale is subject to market and other conditions.

Wells Fargo Bank on Thursday agreed to pay $175 million to settle allegations by the Department of Justice (DOJ) that it targeted black and Hispanic neighborhoods in cities such as Baltimore and Chicago and steered those borrowers into high-cost subprime loans.

The Federal Reserve Bank of New York is planning on selling more assets from 20 CDOs forming part of its Maiden Lane III (ML III) portfolio. Offering circulars were released today.

Although “sloppier” Alt-A fixed-rate bonds are attractively priced versus their prime counterparts, Amherst Securities Group (ASG) analysts said in a recent report that the collateral is converging.

Harley Davidson Credit Corp. is planning to sell a $519 million securitization under its Harley-Davidson Motorcycle Trust 2012-1. The transaction is collateralized by motorcycle contract backed notes.

Nearly three-quarters of senior tranches of the tobacco settlement bonds will default should cigarette consumption in the U.S. continue on its current rate of annual decline, said Moody's Investors Service in a report.Specifically, the rating agency finds that if the decline in consumption continues at a 3% to 4% pace, as Moody's projects, bonds constituting 74% of the aggregate outstanding balance of all the tobacco settlement bonds will default.

THL Credit Advisors, the credit affiliate of private equity firm Thomas H. Lee Partners, acquired a credit group from McDonnell Investment Management.

Moody’s Investors Service said that the CMBS conduit transactions that it expects to rate in 3Q12 suggest that the average Moody’s Loan- to-Value (MLTV) ratio, which is the rating agency’s main measure of balloon refinance risk, will increase to 102.1% from 97.8% in the third quarter. Given this expected 4.3% jump, the MLTV in the third quarter will average above 100% for the first time in CMBS 2.0.

Last summer rumors were spreading that a private equity firm had amassed $1 billion in cash and was eyeing investments in mortgage banking firms. A year later it appears that no such deals were struck by the unnamed fund, but that hasn’t stopped the talk about PE firms still looking at the sector.

In a Bank of America Merrill Lynch conference call held yesterday, Theresa O’Neill, an asset-backed strategist from the firm, said that participants in the consumer ABS market need to keep a careful eye on certain regulatory developments related to securitization, namely the bank capital rules, risk retention, as well as any new rules from the Consumer Financial Protection Bureau (CFPB).