To understand the role private-label mortgage financing, MBS players must first wait and see what the government's next move will be. It is not that securitization is not happening. It is just that all the activity in the market is via the GSEs.

The full implementation of Basel III is still years away, but it is already impacting key areas of the securitization market such as mortgage servicing rights. The impact of its liquidity ratios on market participants will likely be felt as early as this year.

Last year, securitization players found themselves stumbling towards recovery, as new regulations and a weak economy posed one hurdle after another for deal makers.

Casting a cloud over the CMBS sector for 2012 is an overhang of about $55 billion in CMBS loans that are coming up for refinancing. Industry participants are watching to see how these loans will fare. These mortgages form part of an estimated total of $365 billion in commercial real estate-backed loans coming due in 2012, according to CMBS data provider Trepp.

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.