Further Lane Securities recruited Stephen Obinna as a vice president for fixed-income trading in its whole-loan group. Obinna previously worked in the whole-loan group at Deutsche Bank Securities. Obinna's hire is part of Further Lane's plan to establish a bicoastal presence. The company intends to hire about 10 new employees. Based in New York City, Further Lane has offices in East Hampton and White Plains, N.Y., Southern Florida, New Mexico and East Lansing, Mich.
Fitch Ratings hired Diana Berezina as an associate director in the rating agency's quantitative products group. She will be responsible for authoring research and commentary on the credit markets, with a focus on relative value and credit risk migration. Berezina will report to senior director Jon DiGiambattista. She joins Fitch from Nomura Securities, where she was an associate for three years in its structured finance research team.
Goldman Sachs might be ramping up its mortgage business in Europe, even though the New York-based investment bank is being officially mum on the subject. However, a source familiar with Goldman's London operations said the firm has quietly hired a group of people in the past few weeks to launch an RMBS offensive against its stronger competitors, mainly Morgan Stanley and Merrill Lynch, despite recent weak market performance. Goldman Sachs, whose forays into Euro ABS have yet to impress, is said to have hired the former head of Deutsche Bank's European ABS underwriting, Jeff Stolz, along with a handful of his junior executives. The source added that Stolz was probably hired to create new origination platforms at Goldman Sachs. And while Goldman Sachs will not expressly confirm any recent hires, Deutsche Bank has confirmed that Stolz left a month ago. Further, if Stolz is the newest to the securities team at Goldman Sachs, it is not clear if he will report to Pablo Salame, a head of credit and mortgages trading at Goldman Sachs in London or Daniel Sparks, head of mortgages in New York, or both.
Countrywide Financial Corp. elected Jess Lederman as its new chief risk officer, replacing John McMurray, who is now Washington Mutual's chief credit officer. Lederman will oversee the mortgage lender's credit and counterparty risk management operations as well as all mortgage insurance and credit enhancement relationships. Lederman, who will report to Chief Investment Officer Kevin Bartlett, joined Countrywide in 2005 and served as managing director of products and pricing before being named to his new position. Prior to joining Countrywide, he spent nine years with Ohio Savings Bank. In his new role at WaMu, McMurray will oversee the mortgage company's overall credit risk strategy and will advise line-of-business heads on strategic credit issues, among other duties. McMurray reports to Ron Cathcart, WaMu's chief enterprise risk officer. The new hire replaces Clifford Rossi, who will remain in the bank with a senior position in the credit division.
The Department of Veterans Affairs promoted Keith Pedigo and appointed his former deputy Judy Caden to be the new director of the VA home loan program, reported ASR sister publication National Mortgage News Online. Pedigo was director of the VA Loan Guarantee Service for 20 years. In his new role as associate deputy undersecretary for policy and program management, Pedigo is responsible for coordinating the activities of VA benefit programs, including the home loan program. Meanwhile, Caden was deputy director of the home loan program until she left in 2000 to be director of education benefits and later director of vocational rehabilitation and employment services.
Dominion Bond Rating Service hired Steven Bavaria as managing director in leveraged finance. Bavaria, who will be based in New York, will spearhead DBRS's entry into the leveraged finance rating business. Before DBRS, Bavaria launched the bank loan rating business at Standard & Poor's. Aside from his work at S&P, Bavaria spent 19 years as a corporate banker, two with Citibank as a deputy director at Citicorp Institute for Global Finance, and 17 years with Bank of Boston.
Recently, the bankruptcy court overseeing the Bear Stearns hedge funds' Chapter 15 proceedings issued a decision denying all of the relief requested in the funds' Chapter 15 petitions. In the decision, the court denied the funds' request that the Cayman liquidations be considered to be the "main" proceedings and said that the Cayman proceedings do not even qualify as "non-main" proceedings. Based on these, the court said that it had jurisdiction under Chapter 15 to grant automatic stay relief or discretionary stay relief. The court stated that the funds should file a Chapter 7 or Chapter 11 petition if they wanted protection for their U.S. assets.
Boston-based First Marblehead Corp. said it has received a subpoena as part of the New York Attorney General's investigation of a number of lending, educational and nonprofit institutions. The student loan firm said it was contacted on Aug. 22 for information on its role in the industry. In a recent statement, First Marblehead said it would "cooperate fully" with the investigation.
GMAC Financial Services plans to purchase remaining outstanding notes from the Capital Auto Receivables Asset Trust, series 2004-1, a move that will terminate all outstanding notes from the class A-4, 2.64% notes, as well as the class B, 2.84% notes. The class A notes will be purchased at about $416 per $1,000 face value, while the class B certificates will be purchased at $1,000 per $1,000 face value.
Retail mortgage lender Ameriquest Mortgage Co. closed its doors after announcing on Aug. 1 that it will no longer take mortgage applications. Its parent company ACC Capital Holdings, also sold its wholesale mortgage origination operation and a mortgage servicing business to Citigroup for an undisclosed amount. Citigroup will acquire servicing rights for $45 billion in loans. The bank had agreed in February to provide working capital to ACC with the option of acquiring the company's assets.
Lehman Brothers announced the completion of the restructuring plan for its residential mortgage origination business, cutting approximately 850 jobs globally. The bank has also closed its Korean mortgage business and will be rescaling its operations in the U.S. and U.K. The total cost associated with these actions is expected to be under $20 million after tax, Lehman said. The bank's residential mortgage origination and servicing businesses in the U.S., Japan and Europe, including Aurora Loan Services, Libertus and ELQ Hypotheken, will now operate under the name Lehman Mortgage Capital. Last month, Lehman announced the closure of its BNC Mortgage subsidiary, as a result of difficult market conditions.
Countrywide Financial Corp. cut 900 jobs last week, most of which were in loan production. Out of the total amount of layoffs, there were 380 in California, 225 cuts in Florida, 150 cuts in Texas and 40 layoffs in Arizona. The company had 61,586 employees as of July 2007, up from 56,059 a year prior. These cuts follow the elimination of about 500 positions last month in the subprime lending unit of its wholesale lending division and its full spectrum lending unit.
MGIC Investment Corp. and Radian Group have terminated their merger agreement, scheduled to close in the fourth quarter, based on "current market conditions" that have made combining the companies significantly more challenging. On Aug. 21, MGIC announced that it had filed suit in federal court in Milwaukee against Radian based on the company's failure to provide the information MGIC had requested in order to complete the merger. Earlier that month, MGIC announced the possibility that it might not complete the deal to acquire Radian, requesting additional information from the company. This decision occurred shortly after the companies' combined $1 billion investment in C-BASS was deemed virtually worthless. All outstanding litigation between the companies will be withdrawn based on the decision not to merge, and no payments will be made in accordance with the termination. MGIC and Radian are currently in the process of selling about half their stake in distressed-debt investment firm Sherman Financial Group.
Fitch Ratings last week downgraded the long-term debt ratings of the Radian Group to A-', from A'. It also cut the insurer financial strength (IFS) ratings of all the firm's mortgage insurance subsidiaries to AA-', from AA.' Fitch's outlook for Radian and its mortgage insurance subsidiaries is currently negative. The agency has also downgraded the IFS ratings for Radian Asset Assurance and subsidiary Radian Asset Assurance, collectively known as Radian Asset, to A+' from AA,' including all obligations insured by Radian Asset. Fitch has also revised the rating watch on Radian Asset, which was originally placed on July 31, to evolving from negative.
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