Cantor Fitzgerald has hired Brian Edmonds as managing director and head of interest rates in the firm's debt capital markets division. He will report to Irvin Goldman, CEO and president of Cantor. Edmonds joins Cantor from Banc of America where he spent three years as managing director and head of government bond trading. Prior to Banc of America, Edmonds spent several years at Credit Suisse First Boston in the same role. Cantor plans to continue to expand its debt capital markets business with additional new hires over the next year.
Law firm McKee Nelson has announced the addition of two new partners to be based in its Washington, D.C., office. William Cejudo will focus on the tax aspects of structured finance transactions, including mortgage-backed and asset-backed securities offerings, and the tax treatment of complex financial instruments. Scott Faga focuses on securitization and structured finance.
JPMorgan Chase announced last week that while it would continue its relationship with both MasterCard and Visa, although JPMorgan indicated that it would be more closely aligned with Visa. Additionally, the banking giant said it had no interest in pursuing a relationship with American Express. The strategy differs greatly from two of its largest rivals - Citibank N.A., which is aligned with Visa and MBNA America Bank, which has allegiances to all three brands.
The Office of Federal Housing Enterprise Oversight is proposing a regulation to require Fannie Mae and Freddie Mac to report mortgage fraud or possible mortgage fraud to OFHEO in a timely fashion. The regulation would also require the enterprises to establish internal controls, procedures and training programs to detect and report mortgage fraud. The rule, which is open for comment, states that an enterprise must notify OFHEO of the enterprise is requiring the repurchase of a mortgage-backed security or other instrument, or if it is declining to purchase an instrument because of suspected fraud.
Moody's Investors Service is updating its loss coverage and excess spread methodology for closed-end second-lien mortgages, based on an analysis of performance. The revised loss coverage levels and prepayment speeds in the base case assume home price appreciation more in line with the historical mean. Among other changes, Moody's will model a small recovery percentage in the base case scenario and no recovery in stress case scenarios.
Fitch Ratings has revised the guidelines for rating residential mortgage-backed securities for which the loan pools include mortgage loans originated in New Jersey, New Mexico, Kentucky, Massachusetts and Indiana. These states have enacted anti-predatory lending laws, which potentially expose RMBS issuers to unlimited or unquantifiable assignee liability for damages resulting from loans determined to be predatory under the laws.
Toronto-based Xceed Mortgage Corp. has entered into an agreement with a syndicate of Canadian investment dealers to expand its asset-backed commercial paper securitization program to $3 billion. Xceed has used Canada's $65 billion CP market to fund over $1 billion in mortgages, resulting in average growth in its mortgages under administration of 107.1% over each of the past three years.
Lehman Brothers Holdings said its U.S. Aggregate Bond Index would extend in duration by 0.09 years in March, to 4.34 years, after the Treasury Department sold
$51 billion of debt this month.
The increase in duration, which investors use to gauge the price sensitivity of bonds to changes in interest rates, is 0.01 years lower than last month, according to Lehman. The increase is 0.08 years less than the historical average
Fitch Ratings released its second RMBS Model Series article, Valuing Borrower and Lender Paid MI in RMBS, which discusses Fitch's approach for evaluating borrower paid and lender paid mortgage insurance in RMBS transactions.
PMI Mortgage Insurance, a Walnut Creek, Calif.-based company, has released its winter 2005 Risk Index indicating a decrease in the probability of an overall house price decline since the autumn of 2004. PMI's Risk Index represents PMI's view on geographic house-price risk and the probability of a regional home-price decline as measured over the next two years.
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