RMBS

It was an Olympic week in the markets this week with three top tier events: Federal Open Market Committee (FOMC), European Central Bank (ECB) and July employment.

The factors would appear to be in place. The Dodd-Frank Wall Street Reform and Consumer Protection Act's Volcker Rule places new restrictions on the big Wall Street banks' bond inventories that, along with new Basel III capital rules, should increasingly push trading of fixed-income, including ABS, to electronic markets.

President Obama disagrees with the Federal Housing Finance Agency's (FHFA) refusal to allow principal reductions on mortgages but can do little to stop it, according to Housing and Urban Development secretary Shaun Donovan.

With the passing of the fifth anniversary of the onset of the crisis, Fitch Ratings clarifies that the structured finance market is “not the culprit” of the economic downfall that hit in July 2007.

Barclays Capital believes that at least one of Freddie Mac’s proposed changes to its HARP 2.0 program will potentially increase prepayments for pre-HARP loans.

The loan limit on VA-guaranteed loans is slated to move up to $729,750 again, staying there for two years now that House of Representatives has passed a Veterans benefits bill.

Ally Financial lost $898 million in the second quarter, blaming its troubled (and bankrupt) mortgage banking division, Residential Capital Corp. (ResCap), for its problems.

The financial health of state housing finance agencies (HFA) is mixed, Fitch Ratings reported Tuesday.

For years, U.S. banks, and especially the largest ones, have dreaded the seemingly inevitable arrival of new and more burdensome regulatory capital requirements. U.S. banking regulators' proposal to revamp those requirements, issued in mid-June, should dispel many of their fears, although the proposal is likely to result in extra work for U.S. banks and may put them at a disadvantage to global competitors in the ABS market.