RMBS

Lawmakers laid out a series of ambitious deadlines in the Dodd-Frank Act, requiring regulators to complete roughly 170 new rules by July.

After waiting ten months, Redwood Trust issued a second Jumbo RMBS, injecting some optimism into the private-label mortgage securitization market.

The Dodd-Frank Act's Section 939A prompts banking regulators to remove any "reference to, or requirements of reliance on, credit ratings" in their regulations and capital requirements. The uncertainty of how regulators will interpret those words has the ABS industry bubbling and proposals emerging.

Borrower behavior changes over time and investors and lenders should constantly adjust the way they utilize the different credit score values to accurately predict loan performance, according to officials from FICO and VantageScore.

Redwood Trust, the only firm to dip its toe back into the Jumbo MBS market, earned $15 million in the fourth quarter, a 63% decline from the same period a year earlier.

Tomorrow the European Central Bank (ECB) is set to extend its minimum two-rating requirement for all existing ABS to remain repo eligible at the central bank’s window. This effectively ends the grandfathering period that started a year ago.

The European primary market has remained mostly quiet over the month of February.

The Obama Administration is willing to start the process of winding down Fannie Mae and Freddie Mac, but it must be done gradually over as many as five to seven years to prevent disruptions to the mortgage market and the economic recovery, according to a high ranking Treasury Department official.

Despite widespread allegations of botched loan administration and conflicts of interest, a review of the three main rating agencies' quality evaluations of servicers (including banks) show that virtually every servicer with a published rating is ranked as "proficient," "average" or better.

Thanks to a $1.3 billion check from Bank of America, Fannie Mae reported positive net operating earnings of $73 million for the fourth quarter — its first such profit since 2007.