Finance

JPMorgan Securities weighed in on the effects on the MBS market of Standard & Poor's lowering its long-term sovereign credit rating on the U.S. to 'AA+' from 'AAA'. They expect forced MBS selling to be very small.

Following its historic downgrade of the U.S., Standard and Poor’s has predictably cut the rating of Fannie Mae and Freddie Mac to ‘AA+’ from ‘AAA.’ At the same time, the agency affirmed the short-term ‘A-1+’ rating on these government-related entities, while removing them from CreditWatch Negative, where they have been since July 15.

As largely expected by the securitization market, Standard & Poor's said today that it has lowered its long-term sovereign credit rating on the U.S. to 'AA+' from 'AAA'.

A global settlement has been reached between Wells Fargo & Co. and institutional investors that purchased Wachovia securities. It is worth a of total $627 million.

Fannie Mae posted a net loss of $5.2 billion in the second quarter and Friday morning requested that the Treasury Department provide it with $5.1 billion of additional funds to keep its capital position in the black.

Starting on Sept. 26, in all reports accompanying new ABS ratings, Moody's Investors Service will include comparisons to standard benchmarks for each transaction's representations and warranties and enforcement mechanisms.

Speeds on MBS were projected to increase around 5% on average in July. However, speeds were 2% slower on FNMAs, flat on FHLMC Golds, and 1% higher on GNMAs.

Loeb & Loeb hired Peter Seiden and Bryan Petkanics to join its New York office as partners in its commercial finance practice.

The Titan Europe 2006-5 transaction posted a notice published yesterday indicating that the Quartier 206 shopping center that secures the defaulted loan with the same name was placed into "public administration".

CMBS delinquencies in the U.S. have reached a new record high as a result of a slew of new late-pays along with below-average loan resolutions last month, Fitch Ratings analysts said.

Redwood Trust, the only firm to publicly issue Jumbo MBS in the past two years, posted a net profit of just $9 million in the second quarter, half of what it earned in 1Q11, telling investors there is a lack of quality mortgages to buy at the right price.

CLOs are finding new fans from among the ranks of another kind of vehicle that invests in leveraged loans — business development companies (BDCs).

With home sales anemic and an anticipated avalanche of foreclosures looming, policymakers are beginning to view renting troubled properties as a way to soak up inventory and put a floor on the housing market. And investors are starting to take note.

California Attorney General Kamala Harris reportedly subpoenaed Citigroup and its Citibank unit to order both to answer questions about the selling and marketing of MBS in the state, according to a Los Angeles Times report that cited a person familiar with the investigation.

New York Attorney General Eric Schneiderman has petitioned to intervene in the proposed $8.5 billion Bank of America Corp. private-label mortgage settlement.

Resource Capital is putting together a CLO that may be completed in the fourth quarter.

Issuance in the auto ABS sector year-to-date was at $34.4 billion at the end of July 2011.

TICC Capital, a business development company, has issued a $225 million CLO, its first, through a special purpose vehicle in which a wholly owned subsidiary owns all of the equity.

The Department of Housing and Urban Development (HUD) has reached a settlement with Bank of America, which releases the company from liability for failing to provide alternatives to foreclosure on 57,000 delinquent government-insured mortgages.The agreement, a draft of which was obtained by American Banker, was previously undisclosed. It has been forged on a separate but parallel track from ongoing settlement talks between BofA, state attorneys general and other regulators over alleged mortgage origination and servicing failures.

One interesting instrument that has been used to take the pulse of the nonagency securitized residential mortgage market has been the U.S. subprime credit default swap index, and recently Fitch Solutions' dropped modestly and reversed its direction, ending what previously had been an unprecedented rally. This trend has looked likely to continue, although it could be short term.