RMBS

In a last-minute reversal, David H. Stevens, the president and chief executive of the Mortgage Bankers Association (MBA), will remain at the trade group rather than departing to run SunTrust Mortgage, as he announced plans to do a month ago.

The Consumer Finance Protection Bureau (CFPB) doesn't have a direct mandate over the securitization industry, yet it is one of the biggest regulatory wildcards, particularly for deals backed by residential mortgages in the foreseeable future.

Securitization market executives may want to reconsider their summer vacation plans. Not only are significant rules stemming from the Dodd-Frank Wall Street Reform and Consumer Protection Act likely to be issued soon, but an earlier proposal amending Regulation AB, which had been put on the backburner, may be finalized over the next few months.

The TBA market is widely viewed as an essential element of a functioning mortgage market, serving as both the ultimate source of liquidity and a crucial pricing benchmark for housing finance. However, the market has evolved significantly over the last few years; a major change has been the growth of the specified pool sector. This column will examine this development and its implications for the MBS and mortgage markets.

ABCP looms large among the victims of Moody's bank downgrades on June 21. Some of these banks support ABCP conduits, which, in turn, saw their ratings drop. And in ABCP land, that single grade difference can make or break a conduit. It's because money market funds - ABCP's biggest investors - can only buy 'P-1' paper.

>Officially launched during the Global ABS confrence in mid-June, the initiative of prime collateralized securities (PCS) could provide the stimulus to issuance for which European players have been waiting.

Proposed bank capital rules are likely to both benefit and crimp the securitization market, potentially making highly rated transactions less attractive while having uneven effects on different asset classes.

Investors appeared very much to play the range this final week of June - and a tight range it is. In the last half of June, the 30-year current coupon spread to 10-year notes has ranged between 106 and 109 basis points.

Lehman Brothers Holdings has completed the sale of its Aurora Bank unit, which concludes "a process that successfully avoided a potentially costly government resolution process of Lehman's two banks and that will ultimately yield significant recovery value for the Lehman creditors," a release from the bank said.