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Michael Youngblood has joined GMAC-RFC Securities as director of research. He will head research initiatives related to agency and non-agency residential mortgage-backed securities as well as analyze trends in metropolitan housing markets. Youngblood reports to managing director Peter McCarthy. Prior to his sting at GMAC-RFC, Youngblood developed mortgage research units at Banc of America Securities, Chase Securities, and Smith Barney. He was also director of residential research product manager at Salomon Brothers Inc., where he worked with MBS stalwart Lewis Renieri.

The Metris Companies Vice President and Treasurer Ralph Than is no longer with the firm. There is no word on the circumstances of his departure, as the company, currently in an earnings announcement blackout period, declined to comment. Taking over Than's duties is Scott Fjellman, who served as assistant treasurer under Than. Prior to joining Metris, Than had held a similar position at equipment finance company CNH Capital (see ASR 5/22/00). Additionally, the company announced last Wednesday a staff reduction of 180 employees, including the departures of seven senior management staff, bringing current employment to 3,700 total. The company will take a first-quarter 2003 charge of approximately $4.9 million in connection with the reductions.

Salomon Smith Barney's Donald Quintin has been relocated to New York from London in order to head the firm's CDO trading business, according to IFR Markets. Quintin worked in the London office as a senior CDO structure. Only a handful of dealers have dedicated CDO traders; these include Bear Stearns, Lehman Brothers, and UBS Warburg.

The Bush Administration is vetting former JPMorgan managing director Mark Brickell as a possible successor for Armando Falcon Jr., director of the Office of Federal Housing Enterprise Oversight (OFHEO). Brickell is reportedly being considered for the OFHEO post, one of the few still held by a holdover Democratic appointee. OFHEO oversees the safety and soundness of Fannie Mae and Freddie Mac, which use derivatives to manage risk in their mortgage portfolios. Mr. Brickell is chief executive officer of Blackbird Holdings Inc., a New York-based firm that operates an online market for swaps and other privately negotiated derivatives. Mr. Falcon's term expires late next year, but news reports stated he would resign if asked to do so.

Salomon Smith Barney is ramping up another MM Community Funding trust-preferred securities backed CDO, reported IFR Markets. Scheduled for mid-March, the deal will be $300 million or larger, depending on asset availability.

A survey of major private-label mortgage issuers indicates that they expect the volume of new jumbo residential MBS to fall 10% to 20% in 2003 from last year's record high, according to a report by Moody's Investors Service. The rating agency predicts private-label securitizations will decline less than the overall mortgage market. It projects that volume in the mortgage market will dip by 15% to 25%. Moody's said $228 billion in jumbo RMBS were originated in 2002.

Freddie Mac announced that it would be restating its earnings for the last two years as a result of a change in accounting for its derivatives transactions. Because of this, the Office of Federal Housing Enterprise Oversight (OFHEO) said it was considering retesting the GSE's capital adequacy for Q3 2002. The change, however, is expected to bolster its capital performance. The accounting change was prompted by Freddie's's new auditors, PriceWaterhouseCoopers. This change would probably prompt further debate on Capital Hill regarding the quality of the disclosures by the GSEs.

Fitch Ratings has placed three classes from three single asset CMBS transactions on rating watch negative. The rating agency cited interest shortfalls caused by expense reimbursements for each transaction. These expense reimbursements are related to various terrorism insurance costs incurred by Wells Fargo Bank, which serves as the master servicer for each of the deals. The transactions and classes affected are as follows: 280 Park Avenue Trust 2001-XL280 ($11.8 million class F BBB'); 1345 Avenue of the Americas Trust 2000-XL1345 ($16.4 million class F BBB'); and 1251 Avenue of the Americas Trust 1999-XL1251 ($67.4 million class E BBB').

The main cause for the high rate of downgrades among arbitrage cash flow CBOs (ACF CBOs) backed by high yield corporate bonds is the severe and unprecedented stress in the US high yield corporate bond market, said Moody's Investors Service in a report issued last week. It stated that more than 70% of all US CDO downgrades in the last couple of years are related to ACF CBOs. The study, aimed at discovering the reasons for ACF CBO downgrades, tracked the performance of three typical ACF CBOs structured in 1997, 1998 and 1999, and compared these to the performance of hypothetical CBOs backed by various historical cohorts.

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