RBS Greenwich Capital continues to lose high-profile traders in its MBS area. Ronald Weibye, managing director and head of nonagency trading, left the company early last week. The move had some logic to it, since many of the traders who reported to Weibye had left the bank in recent weeks, including Stewart Kronan and Jesse Litvak, according to market sources. Weibye also follows several other managing directors out the door, including Joe Walsh, whom the bank tried strenuously to keep, and Jay Levine, who stayed on in what some sources say was a more ceremonial than active capacity. One source put the departures into perspective, saying: "All of those guys were strong guys, but Royal Bank of Scotland is taking over, and they operate things like a bank."
Societe Generale Asset Management (SGAM) has created the position of head of strategic clients, which will be headed by Jerome de Dax. In his new role, de Dax will be responsible for developing a coordinated global relationship at the highest level; for promoting the whole range of expertise, products and services offered by the SGAM Group; and for providing access for these clients to value-added advisory and investment solutions. Laurent Bertiau will replace de Dax as global head of sales and marketing.
Longtime Deutsche Bank Managing Director Michael Commaroto, who was head of whole loan trading and private label MBS, has left the firm recently. During his stint at Deutsche, the bank purchased Lake Forest, Calif.-based Chapel Funding Corp. It also acquired the publicly traded lender MortgageIT Holdings.
EMC Mortgage Corp., a Bear Stearns subsidiary and mortgage loan servicer, announced the appointment of Teji Singh and Melinda Napoli as executive vice presidents and Katherine Reynolds as vice president for the customer relations division. Singh will oversee the development of EMC's proprietary servicing default system, while Napoli will oversee the EMC's real estate owned (REO) department. Most recently, Napoli was senior vice president of continuous improvement at ResMAE Mortgage Corp. Reynolds will assist the customer relations division as it refocuses its attention on default technology and processing.
Royal Bank of Scotland slashed 200 staffers in its global banking and markets business as a response to the global economic credit crunch. The bank said the elimination of jobs was not driven by the cost-cutting program initiated after its ABN Amro acquisition last year. The jobs affected are expected to be in the bank's securitization, leveraged finance and real estate lending areas. Most of the cuts will be in the London offices of the firm's global banking and markets division and in the corresponding businesses it bought from ABN. Global banking and markets accounts for over a third of the bank's profits and, together with ABN's operations, employs more than 28,000 people.
King & Spalding hired structured finance lawyer Mark Dola as counsel for its Washington office. Dola will focus his practice on structured derivatives and securitization deals and will participate actively in the firm's subprime and capital markets special task force. He joins King & Spalding from McKee Nelson, where he was of counsel.
Halcyon Structured Asset Management is gearing up to price a $400 million CLO, which is being arranged by Banc of America Securities. The cash transaction is a mix of 87% senior secured loans and 13% mezzanine and second-lien loans, according to JPMorgan Securities. The deal is slated to close on April 21, 2008, according to Bloomberg. Halcyon declined to comment on the new fund.
Fitch Ratings last week revised its outlooks of the Class B1 tranches of RMAC 2007-NS1 to negative from stable, following the second reserve fund draw of the transaction on its March interest payment date. Fitch said that the GBP443,787 ($878,418) draw was necessary because of "the combination of increased losses and low revenue collections from the pool" during the period. This reduced the reserve fund to 87% of its target level from 97% previously. Credit enhancement under the Class A2 notes stood at 15.7% on March 4. The rating agency also suggested that the revision in its outlooks reflected the deteriorating outlook for the U.K. nonconforming sector. Fitch affirmed the ratings on all other tranches. Standard & Poor's, however, affirmed the Class B1 tranches of RMAC 2007-NS1 and removed the ratings from CreditWatch with negative implications, but took action on the 2006 vintage issues following a full credit and cash flow analysis of the transactions based on the most recent loan level data. All of these transactions drew on their reserve funds on the March interest payment dates mainly because of the lack of basis swap in the transactions to mitigate the basis risk arising from the mismatch between interest rates.
Last Wednesday, the White House announced an expanded version of the FHASecure program aimed at helping an additional 100,000 homeowners who are experiencing house price depreciation and foreclosure. The expansion encourages lenders to write down the value of the loans in return for a government guarantee of timely payments. Unlike a proposal by Congressional Democrats, the administration's plan would not require a large cash infusion to get the program started. The expansion allows the FHA to insure a new mortgage if a lender voluntarily writes down the mortgage principal to either 90% or 97% of the new value, depending on the borrower's risk profile. The expansion will be implemented via an executive order instead of through legislation.
The U.S. House of Represen-tatives Committee on Ways and Means passed the Housing Assistance Tax Act of 2008 last Wednesday by a bipartisan vote of 35-5. The legislation, which was introduced by Chairman Charles Rangel (D., N.Y.), will provide tax credits to first-time home buyers, improve access to low-income housing and allow families to deduct property taxes, among other provisions. Before adopting the proposal, however, the committee made three modifications to the underlying legislation. These changes include increasing the point at which the first-time home buyer credit begins to phase out for married individuals filing jointly from $110,000 to $140,000.
GMAC said that it will transfer 100% of the voting interest of its insurance operations, GMACI Holdings, in a dividend to Cerberus Capital Management and General Motors Corp., which own 51% and 49% stakes in GMAC, respectively. The move is in an effort to avoid having GMAC's ratings cut by insurance rating agency A.M. Best, which would damage the value of the company's insurance operations. GMAC has recently taken a hit in its ResCap mortgage-lending unit, which caused A.M. Best to put the company on review for a possible downgrade.
Moody's Investors Service downgraded the servicer quality rating of Fremont Investment & Loan to SQ4-' from SQ4' and has the company on review for a further downgrade. The downgrade was the result of a "continued deterioration of financial and operating conditions," as well as the recent regulatory actions against the company. On Feb. 26, the Suffolk Superior Court issued a preliminary injunction against Fremont, prohibiting the servicer from initiating or advancing foreclosures on loans that are "presumptively unfair," without first complying with the court's order. The injunction was then modified to further restrict Fremont's ability to sell its mortgage servicing rights to loans being serviced in Massachusetts. The recent management turnover at Fremont and its parent company, were also taken into account in the rating action, Moody's said.
The National Association of Realtors' Pending Home Sales Index dipped to 84.6 in February, down 1.9% from a revised reading of 86.2 in January. The current reading is down 21.4% from the same period in 2007. Economists were expecting the index to decline to 85.2 for the month. February marks the third index drop in four months.
Markit has purchased NTC Economics, which offers global macro-economic indicators and is the owner of the Purchasing Manager's Index (PMI) series. NTC's indices and surveys serve as indicators of business conditions. The PMI series, in particular, has a clientele of 200,000 people in 1,000 organizations including central banks that use the data for information on interest rate and foreign exchange, among other things.
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