The structured finance group at Standard & Poor's continues to adjust to layoffs announced earlier. According to people familiar with the rating agency, Russell Long, a managing director in the CDO group, will leave the company, along with a substantial portion of the CDO group. Ted Burbage, managing director of structured finance ratings, was among those expected to leave S&P, as was Nancy Gonzalez, who worked in CMBS surveillance. Company officials said they do not comment on individual personnel situations.

Ambac Financial Group laid off 25 people on Wednesday as part of its efforts to restructure the company and exit certain lines of business. The layoffs came from areas of business the company would no longer be insuring, which include CDOs, CLOs and other arbitrage-driven transactions; all MBS; auto loan and lease securitizations; credit card receivables; and emerging market transactions. "If you are not in the businesses anymore; you have to make some tough decisions," a spokeswoman for Ambac said. "We have some very talented people we have been forced to say goodbye to."

Horacio Garcia has joined the law firm Abeledo Gottheil Abogados in his native Argentina. From 2005 to 2007,

he was a lawyer for the start-up International Hospital Corp. Holding. Before IHCH, he was an associate at Andrews Kurth for five years, working on structured finance transactions in Latin America, including MBS with political risk insurance and a transaction for YPF Chile, the first in which Argentine trust law was used in a future flow transaction. The first couple of years of his tenure at the Dallas law firm coincided with the ascendancy of Argentina as the leading market in Latin America for local and cross-border securitization. The country's devaluation in January 2002 sent much of that debt into default and turned Argentine structured finance into a nearly exclusively domestic industry. In addition to his efforts in Latin America, Garcia was a member of the work group that drafted legislation governing a secondary market for mortgages in Russia.

Standard Life Investments, one of the largest property fund managers in Europe, has strengthened its Paris-based European property team with the appointment of Philipp Bach as portfolio manager. Bach was formerly an investment consultant for international investors with CB Richard Ellis in Paris.

Hugues de La Marnierre has been appointed global head of sales, fixed income and equity derivatives and institutional commodity derivatives. He will be based in London and will report to Nicolas Fourt, global head of capital markets. De La Marnierre joins Natixis after seven years at Commerzbank, where he was also global head of sales.

Citadel Investment Group has hired Patrik Edsparr, the former global head of rates, foreign exchange, securitized products, fixed income, exotics and hybrids at JPMorgan Chase in London. Edsparr will join Citadel as chief executive of the European business. The new hire will also be responsible for the firm's global fixed-income business, which includes securitized products. Last month, Citadel promoted chief financial officer Gerald Beeson to chief operating officer. The firm has also added to its investment teams by hiring Kaveh Alamouti, a macro hedge fund manager from Moore Capital Management. He will be developing new macro strategies that will be a part of Citadel's multistrategy funds. At JPMorgan, Edsparr was also responsible for proprietary trading and principal investments. Before JPMorgan, he worked at Lehman Brothers in mortgage derivative strategies.

Carlos Planas, former head of global markets at Deutsche Bank in Argentina, has joined Bulltick Capital Markets as head of fixed income. Planas specializes in fixed-income investments in emerging and global markets. In addition to his stint at Deutsche Bank, Planas has held a number of senior executive positions, including those of vice president at JPMorgan in Argentina, where he worked on interest rate issues and bond trading, and director of equity trading for Argentina at Bear Stearns in New York. Planas is on the board of directors at the Mercado Abierto Electronico and the Rosario Futures Exchange. He is also on the Finance and Markets Committee of the Association of Argentinean Banks.

Pioneer Alternative Invest-ments (PAI) hired Lucio Vignati to the European long/short team managed by Riccardo Cavo, head of European long/short. Vignati will help manage the asset growth of the business. Throughout his career, Vignati has gained experience on the buy side as well as the sell side, having worked for primary institutions on both sides. He joins from Lehman Brothers, where he was director of European equity sales trading for almost three years. Before that he was with JPMorgan Securities in European sales trading for four years. Luca Mengoni, chief investment officer of PAI's single manager division, said that the increase in assets the company has seen, coupled with a continued expectation for strong growth, makes this the right time to create Vignati's role.

GMAC Financial Services has promoted Alvaro de Molina to chief executive as of the beginning of April. De Molina, who joined GMAC as chief operating officer last August, will replace Eric Feldstein, who will join Cerberus Capital Management to advise on investments. Cerberus Capital is actually GMAC's majority owner, and General Motors Corp. is the firm's minority owner. Previously, de Molina worked at Bank of America Corp. as chief financial officer and CEO of the capital markets division.

The Office of Federal Housing Enterprise Over-sight last Thursday reduced the 30% capital surcharge for Fannie Mae and Freddie Mac to 20%. OFHEO also said that it will now permit a considerable portion of the GSEs' 30% OFHEO-directed capital surplus to be invested in mortgages and MBS. The GSEs said that they will, in turn, start raising significant capital. UBS believes "everything helps, but this is not any panacea." According to UBS, capital pressures for both GSE will remain, despite OFHEO's capital relief. "Over the next few months, the markets will continue to trade these securities as if they had a credit dimension," analysts said. Morgan Stanley equity analysts view this announcement positively because it allows faster growth in the agencies' retained portfolios and net interest income. They also see this as a "philosophical victory that reaffirms the mission-purpose of the retained portfolios, which government officials and politicians had called into question in recent years."

Citimortgage said it will no longer offer home equity stand-alone or combo products as of last Tuesday. As a result, the mortgage lender will cut 185 jobs, according to reports. All stand-alone and combination loans in the pipeline must fund on or before May 12, 2008, the bank said. Fred Bolstad, executive vice president of Citi's wholesale lending unit, said that home equity products are still available via Citi's retail distribution channels and that Citimortgage "intends to remain an industry leader in both wholesale lending and mortgage lending overall."

Wilbur Ross is purchasing H&R Block's Option One mortgage servicing unit for $1.1 billion. The platform currently services about $53 billion in subprime mortgages. Wilbur Ross is paying $41 million for the mortgage servicing rights; $942 million plus $100 million of retained receivables for the $1.1 billion of advances; and $65 million for $85 million of other servicing-related assets. The advances are expected to increase to about $1.2 billion, and the increment will be purchased at a 3% discount as well.

Interthinx, a mortgage fraud detection software provider, said that it had uncovered more than 42,000 mortgage applications worth nearly $11 billion that contained "significant misrepresentations of the borrowers' income." These applications were all originated and submitted for review in the last six months of 2007 through the company's FraudNet Loan Exchange program. The fraudulent loans were discovered when analysts determined that the program had generated 42,610 income alerts, which warn clients that a borrower has submitted multiple applications and that the borrower's income as reported has jumped by at least 15% within a prescribed period of time.

FGIC Corp., the parent company of Financial Guaranty Insurance Company (FGIC), last Monday announced net losses of $1.89 billion for the 4Q07 and $1.82 billion for the entire year of 2007. FGIC has also stopped writing new financial guaranty business for a period of time to preserve capital, according to a company statement. FGIC has engaged Goldman Sachs to provide advice in connection with its capital enhancement initiatives. The insurance firm has also proposed a considerable restructuring of its insurance operations to the New York Insurance Department. The restructuring plan includes the "organization of a new financial guaranty insurer to be domiciled in New York to provide support for global public finance and infrastructure obligations previously insured by FGIC" as well as to write new business to serve those markets.

The Pan-Canadian Investors Committee for Third-Party Structured ABCP filed an application to the Ontario Superior Court of Justice last Monday to ask for bankruptcy protection for the trusts involved. The application was filed under the Companies' Creditors Arrangement Act (CCAA), which is a federal statute that provides a mechanism where debts, as well as obligations, can be restructured under court supervision and subject to the creditors' and the court's approval. After the CCAA filing, the creditors of the affected trusts, such as noteholders, will be prevented from enforcing their claims. This court-ordered stay will replace the standstill agreement that was part of the Montreal Accord. As a result, DBRS has downgraded 20 of the affected trusts under the Montreal Accord to D'. This rating action was taken after the CCAA filing and should not be seen as a sign of the credit quality deterioration of the assets held by the affected trusts.

Santa Fe, N.M.-based Thornburg Mortgage was granted a reprieve last week by five of its lenders. These lenders agreed to freeze margin calls through March 2009, which Thornburg disclosed in a filing with the Securities and Exchange Commission. The firm said that it had received $1.8 billion in margin calls from Dec. 31 to March 6 and has covered $1.2 billion thus far.

The National Association of Homebuilders' Housing Market Index held steady at 20 in March, unchanged from February. Two of the three components of the index, the current sales and traffic of prospective buyers, remained the same as those in the previous month, while the sales outlook was a point lower.

(c) 2008 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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