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WHISPERS; July 28, 2008

Avon, Conn.-based Structured Finance Advisors (SFA), which has been an investor in the ABS and MBS sectors since 1993, is teaming up with two commercial mortgage veterans to set up a fund that will take advantage of the current lack of market liquidity in the sector, according to Joe Lorusso, president at the firm. The fund is starting out with $10 to $20 million in equity, with a bank that would leverage the equity about 3X, and is targeted toward $300,000 to $2 million loans that have a 65% current LTV. The average loan will be $1 million. These loans will be made out to cash-flowing, profitable businesses that have a pro-forma positive debt coverage ratio. SFA is teaming up with Fred Dupuy and Rich Sleight, who combined have 40 years of experience in commercial real estate. Currently, according to Lorusso, banks have exited the commercial mortgage loan business and SFA, with the help of Dupuy and Sleight, will extend loans to commercial mortgage businesses that are expanding or buying a facility. Lorusso said that SFA's role is to make sure that the criteria are met, to review the loan files and to do the monitoring. "There's opportunity in this end of the market to take advantage of," he said. The company's Web site is sfa-invest.com.

GMAC Financial last Tuesday tapped Thomas Marano as ResCap's chairman and chief executive officer, effective immediately. Marano takes over for ResCap's current CEO Jim Jones, who is leaving the company. Marano will remain a Cerberus Capital Management employee and will be dedicated to ResCap to fulfill this role. He will report to GMAC CEO Alvaro de Molina. Marano was appointed to the ResCap board as non-executive chairman in April 2008 just as he joined Cerberus as a managing director. Before this, Marano spent more than 25 years at Bear Stearns, most recently heading the global operations of mortgage trading and originations and serving on the company's board. Additional management changes announced at ResCap include that of Joshua Weintraub, Cerberus employee and executive committee member of the ResCap board, who will assume the role of ResCap vice chairman. Tony Renzi, chief operating officer of ResCap's U.S. Residential Funding Group, was named to the newly created position of ResCap chief operating officer. Jerry Lombardo, a Cerberus operations employee, will join the company and lead the management of the Treasury function as Treasury executive, succeeding Treasurer Bill Casey, who has left the company. As previously announced, Thomas Neary has joined ResCap from Wells Fargo as executive vice president and senior managing director of capital markets.

Jonathan Kempner, president and chief executive officer of the Mortgage Bankers Association (MBA), will be stepping down on Dec. 31, according to an MBA release. Kempner has spent seven years at the association. MBA chairman Kieran Quinn has named John Courson chief operating officer during the transition period, effective Aug. 1. Courson will assume presidency of the MBA on Jan 1. Courson served as MBA chairman in 2003 and as a member of MBA's Board of Directors, the Residential Board of Governors (RESBOG) and the Commercial Real Estate/Multifamily Finance Board of Governors (COMBOG). He has previously served as chairman of RESBOG, MBA's legislative steering committee, MORPAC, MBA's state and local liaison committee as well as MBA's mortgage reform task force. He has also served as president of the California Mortgage Bankers Association and Michigan Mortgage Bankers Association, and as a director of the Texas Mortgage Bankers Association.

Baker & McKenzie hired Hans Montag as partner in its New York office. Montag joins the law firm from the New York office of Clifford Chance, where he worked for almost 10 years. Montag's practice focuses on representing financial institutions, large corporate issuers, funds and other clients in complex securitization, warehousing and related transactions. This includes commercial and residential mortgage securitizations, asset acquisitions, CLOs, private equity financings, project finance transactions and other types of financings comprising his broad background. In addition, he has extensive experience in both domestic and cross-border transactions.

Legacy Benefits has named Mark Hirshorn as head of its capital market efforts. In leading the company's capital markets initiatives, Hirshorn will develop and market life settlement-based products and structures while establishing relationships with clients. Before joining Legacy, Hirshorn spent two years as director of U.S. securitization at Fortis Securities, focusing on client-based transactions and projects involving structured solutions in the global markets. Before Fortis, Hirshorn spent 10 years at Bayerische Hypo-und Vereinsbank, where he managed the bank's U.S. securitization efforts.

The financial industry group (FIG) of Reed Smith launched its firm-wide derivatives and structured products group. The new group comprises interdisciplinary and multi-jurisdictional groups of lawyers and combines transactional, restructuring, litigation and insurance recovery lawyers who will advise parties on derivatives and structured transactions of all kinds, including dealers, investors and issuers, among others. The FIG is made up of lawyers in the firm's U.S., the U.K., the Middle East and Asia offices. These lawyers generally have capital markets experience and have practices that focus on restructuring, financial services litigation, insurance recovery and financial regulatory matters. The range of products that these lawyers cover include securitization and related structured products of all types, for instance ABS, MBS, CDOs and CLOs - primary, synthetic and squared - together with attendant CDS, wraps and other financial guaranty insurance; auction rate, index and similar securities; and interest rate, credit, equity, foreign exchange, commodity and other derivatives.

HSBC appointed Rafi Ahmed and Anand Krishnamurthy as co-heads, global markets, Middle East and North Africa. Rajiv Shukla has also been appointed head of debt capital markets, Middle East and North Africa. Ahmed joined HSBC from JPMorgan in London in 2002. He has 28 years of banking experience, of which 20 are in global markets, where his focus has been on client coverage and derivative sales capabilities. He has led the substantial growth of HSBC's business in these areas since his return to the region in 2006. Krishnamurthy has been with HSBC since 1992, most recently as co-head of global markets, India, and has extensive experience encompassing trading, risk and balance sheet management. He has been leading global markets product development for HSBC in India and has also been actively pioneering Indian onshore derivatives market development. Together, the two will be responsible for the Treasury, foreign exchange, derivatives, debt and equity capital markets, research, and leveraged and acquisition finance. In addition, HSBC's direct brokerage on the UAE's two domestic exchanges falls under the global markets business. Meanwhile, Shukla has been head of debt capital markets at HSBC Saudi Arabia for four years, and before that, was with Citibank in corporate/structured/project finance, capital markets and private equity.

Guggenheim Capital Markets launched a Midwest sales office to operate out of Guggenheim Partners' headquarters in downtown Chicago. The new team will expand coverage currently being handled by GCM's New York and West Coast offices. The Chicago sales team will be led by David Connelly, who spent the past 24 years with Bear Stearns and was head of fixed-income sales there for the past 17 years. He will be joined by Tom Unger, previously with UBS AG, as well as JP Gagne, Robert Pritchett, Kevin Smith and Brian Vanselow, all of whom were previously with Bear Stearns. "We believe it an opportune time to expand our level of service along with our expanding product lines," said Ron Iervolino, head of GCM's sales and trading desk.

Michael Keane, chief technology officer of three years for RealtyTrac, has been promoted to fill the newly created position of chief product officer, effective immediately. The new position will allow Keane to focus entirely on feasibility analysis, development and implementation of new products for RealtyTrac. Keane has been with RealtyTrac since 1996 and has played a key role in its startup and growth. A search for a new chief technology officer is underway.

Vincent Tritto joined Primus Guaranty as general counsel who will serve on the company's operating committee and report to Thomas Jasper, the company's chief executive officer. Tritto joins Primus from BlackRock, where he served as managing director and senior counsel in the firm's legal and compliance department. Earlier, Tritto held positions at Morgan Stanley Investment Management and Roger & Wells.

On July 18, the vodka maker Belvedere SA filed for bankruptcy protection following a covenant breach. According to JPMorgan Securities analysts, this is the first public default in the European CLO market in several years, although they called it a non-event considering the limited concentrations. The firm said that their 120 CLO overlap universe, the senior secured FRNs appear in only three CLOs, although this is based on the most recent Intex data and the bonds may have been more widespread, they said. This default is one of "the first publicly measurable examples of European manager style differentiation."

The Office of Federal Housing Enterprise Oversight reported that home prices slipped a seasonally adjusted 0.3% in May. This is an improvement from April's decline of 0.8%. Year-over-year, prices are down 4.8%. Regions of the country recording the largest monthly declines were South Atlantic (-1.2%), West South Central (-1.0%) and New England (-0.8%). The Pacific region actually posted a slight gain of 0.3%, while the East North Central and Middle Atlantic states improved 0.1% each and the West North Central states were flat. Year-over-year, home prices are down 14.5% for the Pacific states, followed by the Atlantic states at -5.8%, then the New England and Mountain states at -5.0% and -4.9%, respectively. The West South Central oil patch states are the only areas showing a year-over-year gain of 0.5%.

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