There were 5,119 registrants at ASF 2012 - an impressive show of strength considering the issuance tally for certain market segments. But let's not forget: there've been only four Jumbo RMBS in the last three years.
As Absalon CEO Alan Boyce put it, anticipating the return of private label RMBS is like Waiting for Godot, the iconic play where the titular character never quite arrives. The analogy's a good one: the narrative of the mortgage market is looking more and more like a tragedy.
Most securitization pros at the event blamed regulators for the lack of activity, and not only in the mortgage sphere. In his opening remarks, ASF Executive Director Tom Deutsch identified three legislative items that players need to watch out for in 2012: the Volcker Rule, conflict of interest rules and the market risk notice of proposed rulemaking. But these are just the tip of the iceberg given the myriad regulations coming out of Dodd-Frank.
This could be why the numbers for the conference were so high. ABS players are coming together to figure out how to get to the bottom of regulations so they can structure and issue transactions again. No one's aiming for the volumes of the industry's glory days. But we need at least enough activity for big investors to justify a real commitment to the market.
And this has begun to happen - not all the stories in our world have been tragic. Certain asset classes such as auto loans, CMBS, and CLOs have been bouncing back. Players would like to see that energy extend to residential mortgages and other troubled asset classes.
This month's ASR features scenes from the conference and highlights some panels where key market themes were brought up. Among them are the European crisis and its impact on domestic securitization; consumer behavior that determines the quality of securitized collateral and the million-dollar question for the private-label RMBS market: Is there hope or are we just beating a dead horse with a stick?
This issue also features a story on litigation that's hindering a more robust comeback for securitization. Here Nora Colomer explores how banks have been whittling down exposure to investor claims by exploiting technicalities in federal securities laws and how those investors are fighting back.
Meanwhile, John Hintze looks at two landmark mortgage transactions that came out in January - the Fed's selling securities from its Maiden Lane portfolio and Redwood Trust's fourth Jumbo transaction under its Sequoia Trust. Are these transactions harbingers of hope or aberrations that aren't enough to turn the tide?
And then there's President Obama's mention of a possible mass refinancing program that's akin to what MBS market players have been talking about for a long time. Sally Ann Runyan reports that if the administration successfully expands credit-impaired refinancings into a low mortgage rate, it will need help from the Federal Reserve to buy those MBS. This is because traditional buyers such as banks could face significant asset liability management issues depending on the term and rate of the securities.
Finally, Felipe Ossa looks at ratings volatility in eurozone retained transactions, as well as other issues that might shape the fate of deals that are repo'd with the European Central Bank. Felipe has also been one of the reporters helming our weekly newscast sponsored by Deloitte. Last week's bulletin features news from ASF and Obama's state of the union address.