Finance

With the rated securitization market staging a comeback and bank financing more readily available, investors in ABS placed in the traditional private market are increasingly confined to smaller deals backed by more esoteric assets.

As the New York Federal Reserve moves closer to completing the winding down of its Maiden Lane (ML) vehicles, investors face a falloff in inventory volumes. This poses a further challenge in this yield-starved environment.

Commercial banks, still busy with the business of tidying up their portfolios and shrinking balance sheets, are slowly getting back to small business lending. However, the void created by their long absence has been increasingly filled by both smaller regional banks and nonbank lenders. It's the latter that are driving securitization because it increases their access to funding, allowing them to grow lending volumes.

The ASF recently released a white paper entitled "Discussion of a Proposed Single Agency Security" that outlines the issues to be addressed in effectively merging the securities markets of Fannie Mae and Freddie Mac to reduce "TBA market inefficiencies." This column will discuss the implications of unresolved issues raised by the report.

By the end of this year, RMBS issuers keen on obtaining funding from the European Central Bank, as well as those already using these securities as collateral in sale and repurchase agreements, will need to input data on the underlying mortgages into the newly created European DataWarehouse, known pithily as ED.

Scheduled to launch later this year, the European DataWarehouse will, for the first time, house loan-level data on a wide range of loans backing the region's ABS. The European Central Bank is the information repository's biggest client and champion.

Securitization market participants welcomed Deutsche Annington's July 10 announcement of German Residential Asset Note Distributor's (GRAND) proposed loan restructuring.

With interest rates low and federal housing initiatives in full force, the July prepayment report, scheduled for release in August, is expected to show an increase in speeds.

Freddie Mac is extending its streamline refinancing program to mortgages with loan-to-value ratios of 80% or less, bringing its Home Affordable Refinancing Program in line with Fannie Mae’s.

Given that the subprime auto ABS market has rebounded in the last three years, Wells Fargo believes that the new-issue volume in the sector “should easily” exceed last year’s $12.6 billion.

Maybe housing really is back. Standard & Poor's reported Tuesday morning that its 20-city house price index rose for

Ed DeMarco, acting director of the Federal Housing Finance Agency (FHFA), said Tuesday that struggling borrowers whose loans are owned by Fannie Mae and Freddie Mac will not be allowed to wipe out part of their mortgages under a government program, defying pressure from the Obama administration and top Democratic lawmakers.

Barclays Capital, Citigroup Global Markets, Credit Suisse and Deutsche Bank Securities were among the winning bidders for the sale of roughly $4.5 billion of additional assets from the Maiden Lane III (ML III) portfolio, the New York Federal Reserve said in a press release today.

For those in the market who believe bank lending criteria has gotten too tight, a recent survey from Fair Isaac Corporation (FICO) has some good news.

Wells Fargo Home Mortgage is embracing residential reforms mandated by the new national servicing standards, regulatory consent orders and the Dodd-Frank Act, according to an executive at the nation’s largest servicing shop.

There were 60,000 completed foreclosures in the U.S. in June 2012, according to CoreLogic’s National Foreclosure Report for June released today.

Marathon Asset Management has appointed investment services provider BNY Mellon as trustee, collateral administrator, paying agent and calculation agent for its $356 million CLO.

Knight Capital Group hired Robert Cestari and David Simek for its institutional fixed-income sales and trading group.

The securitization market kicks off this week the way it usually does nowadays — with an auto ABS transaction.

Barclays Capital analysts believe that the temporary and minor increase in prepayments from the Special Direct Consolidation program will have a limited effect on FFELP ABS bond valuations, according to the firm’s latest Consumer ABS Weekly.