Finance

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.

On Feb. 10, Freddie Mac made an unexpected announcement that it would "purchase substantially all 120 days or more delinquent mortgage loans from the company's related fixed-rate and adjustable-rate (ARM) mortgage Participation Certificate (PC) securities."

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.

What a difference a year, or three, makes.

Fannie Mae said Friday that many mortgage lenders are not complying with the most basic underwriting guidelines, such as confirming a borrower's identity or verifying a Social Security number.

European CMBS loan maturities in March and April will lead to a rise in the number of loans that are now in a standstill or going through a workout process, according to Fitch Ratings.

The Securities Industry and Financial Markets Association (SIFMA) now carries price data for around 25,000 federal agency bonds on its investinginbonds.com Web site.

Donald Kohn, the vice chairman of the Federal Reserve, will step down from the post when his term ends in June, according to a report from The Wall Street Journal.

A Federal Deposit Insurance Corp. (FDIC) plan to restrict securitizations is drawing intense opposition from bankers, who claim it would damage the secondary market.

Moody's Investors Service will be publishing its estimates for recoveries on most of the RMBS it rated that were issued in the 2005 to 2008 period.

CIT Financial is in the market with a $667.3 million equipment lease-backed deal lead by Bank of America Merrill Lynch, Barclays Capital and Deutsche Bank Securities. The CIT deal is Term ABS Loan Facility (TALF)-eligible.

A prime RMBS deal was announced in Europe this week — Alliance & Leicester’s £1 billion ($1.54 billion) offering backed by U.K. mortgages. Alliance is Spanish bank Santander's U.K. unit.

GMAC Financial Services has forced out six managers in the servicing division of Residential Capital Corp. (ResCap) as part of a belt-tightening effort at the company.

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

Freddie Mac will stop purchasing and securitizing interest only mortgages.

A report released Thursday by the Boston Consulting Group (BCG) forecasts a "two-speed" banking system to come, with major banks in developed countries, and especially the U.S., stuck in low gear.

There was a lot of continuing talk last week about signs of a coming "bottoming out" and eventual "recovery" in housing, but a risk to that forecast is that temporary government aid may be responsible for it.

February remittance reports — representing the January collection period — showed an early sign that the trend of REO stock dipping experienced nationwide might have reversed, according to Barclays Capital analysts.

House Financial Services Committee Chairman Barney Frank said hearing on GSE restructuring has been rescheduled to March 23.

McCarter & English appointed Jonathan Guest as a partner in the Boston office’s corporate, securities and financial institutions group.