RMBS

It was a record breaking week in terms of the 10-year note yield, lower coupon MBS prices and mortgage rates.

The Office of the Comptroller of the Currency (OCC) "underestimated" the risk of poor foreclosure practices at national banks and did not devote enough examination resources to identify those problems, according to the agency's chief watchdog.

Although mortgage underwriting standards were much too loose during the “go-go” years of 2004 to 2007, the pendulum on credit standards has swung too far the other way, according to a new report from Amherst Securities Group.

Is Ginnie Mae actually making progress in clearing its backlog of issuer applications? Answer: It all depends on who you ask.

Standard & Poor's has updated its criteria for assessing counterparty risk in covered bond programs, which could affect up to 50% of outstanding ratings on covered bonds.

In a twist on the old cliche about Brazil, it seems at times that covered bonds in Latin America are the instrument of the future, and always will be.

While participants of the 2012 SiLAS conference hosted by Euromoney Seminars and LatinFinance were happy to move on from the Mexico-centric talk of previous years, more than a few players were still buzzing about the plans by Mexican originator and recurring RMBS issuer Infonavit to eventually morph into an investor. (See graph at right for projected cash flows.)

Bankers are holding out hope for a last minute 'fix' to new capital requirements that will make it much less attractive for European insurers to hold ABS. Insurance companies have become important buyers of European ABS since the financial crisis.

Greece's RMBS sector would be one of the victims of the country's exit from the eurozone, which appears increasingly likely in the run-up to June 17 elections between parties supporting and opposing austerity measures, a condition of the country's bailout.

The news of massive trading losses in JPMorgan's Chief Investment Office renewed calls for strict implementation of the Volcker Rule, the section of the Dodd-Frank Act restricting banks from proprietary trading. In my mind, the episode highlights the importance of intelligent and comprehensive risk-management procedures. While provisions such as the Volcker Rule can play a useful role, they cannot serve the desired purpose of mitigating risks to the financial system without robust risk-management standards enforced by regulators.