How much higher can a rating agency grade a structured finance deal over its respective sovereign? While a perennial topic in emerging markets, it has not historically been a big issue in Europe.

Structured finance players in Latin America pushed through 2011 with few scars, especially given the turmoil pounding European markets.

The need for private capital to return to mortgage financing is a major discussion point in the future of U.S. housing. REITs are an ideal vehicle for bringing in that private capital. However, before this can occur, a couple of things need to happen, said Calvin Schnure, a mortgage market economist at the National Association of Real Estate Investment Trusts (NAREIT).

MORTGAGE DATA 30-yr. Fixed 15-yr. Fixed 5-yr Treasury 1-yr Treasury- MBA Refi Home Purchase Rate Mortgage Rate Mortgage Indexed ARMs Indexed ARMs Index Index Week ending 01/12/12 3.89%

2012 2011 2010 ABS (Public + 144A) 10,383.2 4,542.7 2,863.6 ABS (Public + 144A excluding CDOs) 10,202.7 4,542.7 2,863.6 ABS (Public Only) 8,334.8 3,144.7 241.6 ABS (144A Only) 2,048.4 1,397.9 2,622.0 Non-Agency MBS 1,048.3 1,603.1 - Agency MBS - 19,495.5 518.7 CMBS - - -

Manager Activity: Autos Book Runner Amount (US$ Mil) Rank Mkt.

According to Standard & Poor's 2012 CMBS outlook, as much as 63% of $19 billion in 2007 vintage five-year CMBS loans coming due in 2012 could fail to refinance in case borrowers are not willing to put in additional equity. The rating agency bases its estimate on the $13.3 billion of these five-year CMBS loans for which S&P has adequate net operating income data. Based on this balance, S&P expects about $7 billion to $8 billion of 2007 vintage loans to face refinancing difficulties.

In the emerging markets at the edges of Europe, 2011 did not generate much excitement for global structured finance players; many of the deals that did go cross-border were purchased by multilateral banks. This is understandable given the crisis engulfing their neighbors.

Sears Holdings Corp. announced on Dec. 27 that it is closing up to 120 Kmart & Sears full-line stores.

With major investors exiting the reverse mortgage space, originations of government-backed Home Equity Conversion Mortgages have dropped by 950 to 1,100 loans a month.

The surge in refinancings this fall pushed Fannie Mae's issuance of MBS to $63.7 billion in November, up 20% from the prior month.

Massasuchetts Mutual Life Insurance Co. has filed a lawsuit against Merrill Lynch, Deutsche Bank Securities, Goldman Sachs, JPMorgan Securities, and RBS Securities, according to the Boston Business Journal.