ABS

Every month Fannie Mae and Freddie Mac are paying bondholders about $1 billion to cover seriously delinquent homeowners.

Almost one in three mortgaged homes in the U.S. — representing 15.2 million loans — now has negative equity, according to a new report issued by First American CoreLogic (FACL).

Chase priced two credit card transactions from its Chase Issuance Trust, Class C (2009-5) and Class B (2009-4). Both transactions are lead by JPMorgan Securities.

Freddie Mac refinanced nearly 29,000 loans under the Obama administration's Home Affordable Refinance Program (HARP), which is designed to give borrowers with loan-to-value ratios above 80% a chance to refinance and lower their mortgage payments.

The American Bankers Association (ABA) released a white paper that outlined concerns over the expansion of mark-to-market accounting and the lack of due process and divergence between the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) on projects relating to financial instruments.

Moody's Investors Service launched a newsletter offering investors information and analysis about key credit issues affecting the RMBS market.

Joseph J. Murin, the president of the Ginnie Mae, is stepping down after just over a year at the federal agency.

Every month Fannie Mae and Freddie Mac are paying bondholders about $1 billion to cover seriously delinquent homeowners.

Royal Bank of Scotland hired Brian Lancaster to head securitization strategies for the Americas global banking and markets division.

Direct-to-consumer (DTC) loans carry a higher risk of borrowed funds not being used for education as well as excessive or unnecessarily expensive debt and as a result could face higher loan default rates and losses than those of more traditional school loans, Moody’s Investors Service reported.DTC loans have constituted a significant portion of transactions sold by issuers of securities backed by pools of private student loans over the past five years.But DTC loans are disbursed directly to the student borrower and/or co-signer, and unlike the more traditional school channel loans, are not school certified regarding enrollment status and the loan amount or marketed through school financial aid offices.Moody’s said DTC loan defaults and delinquencies reflect their weaker credit quality and performance across all issuers who had both types of loans in their securitizations, despite varying results across issuers.Sallie Mae’s DTC loan expected lifetime default rate is 1.3 times that of their school channel loans, and First Marblehead’s DTC loan rate is 2.9 times that of school channel loans, according to Moody’s.School channel loans depend on the assurance that borrowed funds will be used for education whereas two key safeguards of school channel loans limit the ability of a student to incur more debt than necessary, Moody’s said.First, schools provide lenders with certification before disbursement of funds that typically includes verification of borrower enrollment status, grade level, anticipated graduation date and authorized loan amount. Second, funds are disbursed directly to the schools instead of to the borrowers.Moody’s said that DTC loan risk can be mitigated by ensuring that the student displays proof of enrolling in and remaining in school.Other suggestions include capping the lifetime and academic-year loan amount limits, checking that the loan amount requested by the borrowed matches the expected attendance costs of their school, and checking with the credit bureaus to other credit requests by the borrower in order to minimize risk of over-borrowing.Also, to mitigate the risk of fraud, cross-checking the loan applicant for fraud with the credit bureaus and using the bureaus’ fraud scores to rate the application for likelihood of fraud is suggested.Direct-to-consumer (DTC) loans carry a higher risk of borrowed funds not being used for education as well as excessive or unnecessarily expensive debt and as a result could face higher loan default rates and losses than those of more traditional school loans, Moody’s Investors Service reported.

MBIA Capital Management Corp looks set to replace Vertical Capital, LLC as asset manager for Vertical CRE CDO 2006-1 Ltd.

Helios Capital, LLC, has completed $30 million in mortgage loan transactions in the Tri-State area and Florida over the last seven months.Helios Capital, LLC, has completed $30 million in mortgage loan transactions in the Tri-State area and Florida over the last seven months.The New Jersey-based commercial loan advisory firm was founded in January of this year by Jonathan Horn, senior managing director, and Josh Malka, managing director. The two are former New York-based private equity managers. The firm is also an affiliate of Onyx EquitiesHelios specializes in individual loan and portfolio sales in the secondary market for the acquisition and disposition of commercial mortgage loans. It also aims to facilitate and make the bank loan trading process between financial institutions and investors more efficient.The firm recently closed three deals that contribute to its small balance commercial loan transactions. The first deal completed in Brooklyn, New York, totaled $3.5 million for a mixed-use, multifamily building comprised of five residential units and a 5,000-square-foot medical office space sold to one of Helios’ private investors.Another deal completed in Harlem, New York, totaled $2.449 million for the structured sale of a 24 unit multi-family building.A third deal completed in Wenonah, New Jersey, totaled $2.3 million for a 35 unit multi-family building in Gloucester County on behalf of a local bank.Helios Capital, LLC, has completed $30 million in mortgage loan transactions in the Tri-State area and Florida over the last seven months.Helios Capital, LLC, has completed $30 million in mortgage loan transactions in the Tri-State area and Florida over the last seven months.

Bank of New York Mellon Corp.'s agreement Wednesday to buy Insight Investment Management Ltd. for $387 million from Lloyds Banking Group PLC could force some of the other large custody banks to step up acquisition efforts.Based in London, Insight Investment specializes in so-called liability-driven investment solutions, active fixed-income asset management and alternative asset management. Founded in 2002, it is the third-largest manager of U.K. pension funds. The deal would add$131.9 billion in assets under management for Bank of New York Mellon.Ronald P. O'Hanley, the president and chief executive of BNY Mellon Asset Management, said that when the deal is completed it wants to offer Insight's services in other markets, including the United States, Germany and Japan."For the foreseeable future, they will be the dominant player in LDI solutions in the U.K., but given our position in other markets, we see an opportunity to broaden what we offer to existing clients globally with these capabilities," he said. LDI refers to management of liabilities for pension plans, insurance companies or foundations.Andrew Marquardt, an analyst at Fox-Pitt Kelton Cochran Caronia Waller, said that, on its face, the deal is relatively small. It would add 14% to Bank of New York Mellon's assets under management to give it $1 trillion, but he said it could hasten the other three large trust banks to respond with deals of their own. He said all three are well capitalized and could be ready to buy."I think BNY Mellon, Northern Trust and State Street have been pretty consistent in their thought process — everyone wants to be opportunistic," Marquardt said.But making deals will not necessarily be easy, he said. "I think everyone is always interested in deals, but there are higher hurdles because of the uncertainty in the markets," he said.O'Hanley said he expects banks to make more asset management acquisitions this year. "Whenever you go through a period of stress, it tends to lead to deals," he said. "I think there will be more deals, but I don't know that there are more buyers out there, though private equity seems extremely interested."Industry executives have been debating whether now is the right time to aggressively pursue wealth management acquisitions. Some have advocated acquiring now to take advantage of ready capital and lower prices. Others have advocated a wait-and-see approach.Analysts said regardless of how cautious they may appear, companies are always looking to buy. "For the right price there is always an opportunity," said Rus Prince of Prince & Associates in Shelton, Conn."The issue is pricing more than anything right now. Interest in acquiring has started to quietly intensify in the last six to eight months. People are saying they aren't going to buy, but they are still looking all over the place for the right deal."According to SNL Financial, there have been 32 asset management acquisitions during the first seven months of this year, including BlackRock Inc.'s acquisition of Barclays Global Investors from Barclays PLC. There were 41 asset management acquisitions during the first seven months of last year.Marquardt said it is an attractive time for large financial services companies to buy asset managers because "it makes sense to buy something that diversifies revenue and is less capital-intensive." He said he expects more such deals this year. For example, Bank of America Corp. continues to shop Columbia Asset Management."The primary areas of focus for growth via acquisition is asset management and asset servicing businesses," Marquardt said. "These deals are a good indication that capital has been rebuilt and they are comfortable with where they stand."Burton Greenwald of BJ Greenwald Associates in Philadelphia said he expects more deals "if this market remains at current levels or equity prices continue to move upward.""You are probably entering a more realistic world to make deals," he said. "When markets took such a beating, asset managers were reluctant to sell at such low multiples. Now, prices are getting back to normal and we should see more deals."Bank of New York Mellon Corp.'s agreement Wednesday to buy Insight Investment Management Ltd. for $387 million from Lloyds Banking Group PLC could force some of the other large custody banks to step up acquisition efforts.

Noting improvements in many sectors of the economy, the Federal Reserve Board's policymaking committee said Wednesday that it would complete its planned $300 billion of Treasury securities purchases by October.The Fed announced the purchases in March to thaw stubbornly frozen credit markets, and Wednesday's announcement represents the central bank's latest efforts to return to a degree of normalcy. In June the Fed said it would stop auctioning off Treasury securities and also ended some support to money market mutual funds.Wednesday's policy statement made no mention of other liquidity programs the Fed continues to run, including the Term Asset-Backed Securities Loan Facility, which is still slated to expire at yearend.Policymakers said the overall economy is "leveling out" and expressed confidence that the Fed's efforts to support financial institutions, coupled with other monetary policy actions and the Obama administration's stimulus package, could lead to growth.Noting improvements in many sectors of the economy, the Federal Reserve Board's policymaking committee said Wednesday that it would complete its planned $300 billion of Treasury securities purchases by October.Noting improvements in many sectors of the economy, the Federal Reserve Board's policymaking committee said Wednesday that it would complete its planned $300 billion of Treasury securities purchases by October.

WASHINGTON — After several consecutive quarters of disappointing results, net income at the 12 Federal Home Loan Banks surged 56.4%, to $1.1 billion, according to figures released by the Office of Finance Wednesday evening.The growth comes thanks to accounting rules approved earlier this year that require only small, credit-related portions of other-than-temporary impairment charges to be recorded against earnings. Total OTTI charges on the system's private-label mortgage-backed securities came to $2.6 billion during the quarter but only $437 million of that was taken against net income.The new standard placed some perennially struggling Home Loan banks back in the black. The Federal Home Loan Bank of Chicago, which lost $39 million during the first quarter and reported losses during three of the four quarters in 2008, pulled in $103 million during the second quarter.The Home Loan banks in San Francisco, Atlanta, New York, Topeka and Chicago were the top five earners during the quarter.Still, the Home Loan banks in Seattle and Boston continued to lose money. The $35 million quarterly loss in Seattle marked that bank's fourth consecutive deficit. Losses at the Boston Home Loan bank surpassed $83.4 million during the first quarter but shrank to $5 million by June 30.The overall earnings gain comes despite a 20.4% drop in advances, which is the system's main business. With the liberalization of the Federal Reserve Board's discount window and a number of liquidity programs sponsored by the central bank, members of the Home Loan banks have more sources than ever from which to tap funding.The system's combined balance sheet lost 14.9% from yearend, with total assets coming in at $1.1 trillion.Retained earnings at the 12 banks totaled grew roughly 20% during the quarter, to $6 billion.WASHINGTON — After several consecutive quarters of disappointing results, net income at the 12 Federal Home Loan Banks surged 56.4%, to $1.1 billion, according to figures released by the Office of Finance Wednesday evening.

According to a Fitch Ratings survey, the majority of senior credit investors in Europe believe that the markets are past the worst of their disruption.

Fitch Ratings confirmed the ratings of 40 covered programs according to its new liquidity requirements that took effect on July 7th.

Jefferies made eight appointments within the investment bank’s MBS and ABS group, which is part of the fixed income division at the firm.

The index showed that delinquencies have receded in recent months. This indicates that moderate improvement in default activity is possible for the rest of this year. Fitch director Brad Sohl said that while delinquency and default performance of timeshare receivables is weak relative to the past — and up 37% year-over-year — credit enhancement should result in limited negative rating actions. Total delinquencies decreased from February’s all time high of 5.58% to 4.89% in 2Q09. Monthly defaults of .88% for June — the highest observed level for the index — are up nearly 48% from last year’s .52%. Also, default reached 8.75% for the index in June. However, Fitch expects default levels to moderate slightly in the coming months, in light of recent downward delinquency trends.Fitch’s outlook for asset performance is that it will likely deteriorate, although the ratings will remain stable. The Fitch timeshare performance index, which summarizes average monthly delinquency and gross default trends tracked in Fitch’s database of timeshare ABS, is available on a quarterly basis.Total defaults on U.S. timeshare ABS hit another peak in the second quarter, according to Fitch Ratings timeshare ABS index.Total defualts on U.S. timeshare ABS hit another peak in the second quarter, according to Fitch Ratings timeshare ABS index.

Catastrophe bond issuance has jumped this year, after a complete standstill during the second half of 2008.