ABS

FBR Capital Markets Corp. entered into a definitive agreement to acquire Watch Hill Partners, a boutique corporate finance advisory practice in New York.

Maxim Group expanded its fixed-income team with three additions, the New York-based investment bank announced today. The three new executives will all serve as traders.

The federal government has put up what a regulator said was a total of about $1 trillion to prop up Fannie Mae and Freddie Mac through capital infusions and purchases of their corporate debt and MBS since the two mortgage giants were placed in conservatorships last September.

Moody's Investors Service said its negative outlook for Australian residential and CMBS and ABS could persist for another 12 to 18 months.

Close to $500 billion or 6% of U.S. CMBS are currently in special servicing and that amount could double by the end of the year, according to Fitch Ratings.

Societe Generale Corporate & Investment Banking made two senior appointments in its Asia Pacific flow fixed-income and currencies team to head the bank’s push into flow business.

With private equity becoming harder to raise, investors hoping to clean up from the mortgage market's wreckage are turning to a vehicle that has fallen in and out of vogue over the years: the real estate investment trust.

Legislation to regulate derivatives appeared to be on the fast track Thursday as two House committee chairman said they were close to a final agreement on a bill that would significantly curb trading of credit-default swaps and provide strong incentives for banks to bring contracts on to regulated exchanges.

Government Problem-Loan Principal-Reduction Guidelines to ChangeStarting August 15, servicers can reduce the principal amount of a troubled Federal Housing Administration-insured mortgage by up to 30% so the homeowners' monthly payments are reduced to 31% of income. "Tens of thousands of FHA borrowers will now be able to modify their mortgages," said HUD secretary Shaun Donovan. Under the new program, borrowers have to be 30-days delinquent to qualify and traditional FHA loss mitigation options would not be effective. "There is no net present value test for eligibility," the guidelines say. However, borrowers have to make timely payments during a three-month trial before the modification is finalized. Mortgage banking consultant Brian Chappelle said the new program should be able to help a high percentage of FHA troubled borrowers because their loans were not underwritten based on stated incomes or second mortgages to avoid paying mortgage insurance. Servicers will receive $1,250 incentive payments for completing these FHA modifications.Starting August 15, servicers can reduce the principal amount of a troubled Federal Housing Administration-insured mortgage by up to 30% so the homeowners' monthly payments are reduced to 31% of income.

PennyMac Raises $320 Million in Initial Public OfferingPennyMac Mortgage Investment Trust, Calabasas Hills, Calif., said its initial public offering of 16 million common shares has been priced at $20 per share, raising $320 million. The amount raised was somewhat below expectations, according to combined news reports. PennyMac Mortgage Investment Trust intends to use the net proceeds from the offerings to purchase residential mortgages and mortgage-related assets, a substantial amount of which may be distressed. Merrill Lynch & Co., Credit Suisse Securities (USA) LLC and Deutsche Bank Securities are the joint book-running managers for the offering. JMP Securities and Stifel Nicolaus are acting as co-managers. PennyMac Mortgage Investment Trust trades on New York Stock Exchange under the ticker symbol "PMT."PennyMac Mortgage Investment Trust, Calabasas Hills, Calif., said its initial public offering of 16 million common shares has been priced at $20 per share, raising $320 million.

The GSE regulator is taking several steps in response to the continued deterioration of Federal Home Loan Bank investments in private-label MBS investments and he is even considering the creation of an insurance fund to prop up undercapitalized banks. "The Federal Housing Finance Agency in connection with the banks is studying the merits of establishing an insurance fund for the Federal Home Loan Banks," FHFA director James Lockhart said. The fund would "insure the timely payment of principal and interest on their obligations, facilitate mergers if necessary and provide capital assistance to under-capitalized FHLBanks," he said during a speech at the National Press Club in Washington. The director noted that FHFA is developing a framework for supervisory decisions on capital distributions and it is closely monitoring conditions at the FHLBanks where impairments on private-label securities (recorded as "other than comprehensive income") exceed retained earnings. In addition, the agency is issuing a proposal to expand the board of directors of the Office of Finance to include all 12 presidents of the FHLBanks and five independent directors.

Standard & Poor’s announced that its new rating criteria for covered bonds will not be ready for publication until at least September.

Strategic Analytics announced the launch of an internal division dedicated to providing significant solutions in mortgage risk analytics. The Mortgage Risk Analytics group will be led by Director Dale Cline, who has more than twenty years of mortgage experience.

Moody’s Investor Service has downgraded Ambac Assurance Corp., Ambac Assurance U.K. , and Ambac Financial Group.

BNP Paribas Corporate and Investment Banking appointed Patti Carlo and Sherif Elias to its fixed income group.

Pershing Securities Singapore Private Limited, an affiliate of Pershing LLC, a subsidiary of The Bank of New York Mellon Corporation, has received a capital markets servicing license from the Monetary Authority of Singapore.

Hannover Re has renewed its Eurus catastrophe bond issued in July 2006. The bond with a volume of €150 million ($210 million) was placed with institutional investors in Europe and North America.

The Geary Cos. has formed CEMP to get into the re-securitization market, the firm said today.

Wheels SPV is in the market with a $703 million auto lease deal called Wheels SPV, LLC, Series 2009-1.

The mortgage lending industry helped 310,000 homeowners complete workout solutions to stay in their homes in June, HOPE NOW reported today. This is a 25% increase over May.In June, HOPE NOW members and the mortgage lending industry modified 96,000 mortgages, 5.1% down from May’s 101,000. They also initiated 214,000 repayment plans, up 44.9% from May’s 148,000.Since last January, more than 1.5 million homeowners have been helped through mortgage workout plans.HOPE NOW’s participating servicers reported a slight drop in modifications and more than a 40% increase in repayment plans, mainly attributed to servicer participation in Home Affordable Mortgage Modification Program (HAMP).Under federal requirements for HAMP, loans are subject to a three-month trial period before a modification can be completed. This means that a number of workouts that will end up being modifications can only be reported as repayment plays or trial modifications for the time being. June saw 93,924 foreclosure sales, up 13% from May. Prime foreclosure sales in June outpaced subprime sales by two-to-one for the first time since HOPE NOW began collecting data.The organization’s new survey suggests a peak in subprime foreclosure sales occurred 2Q08, and that the largest gain in reported prime loan foreclosure sales occurred in 2Q09 at 154,108.The HOPE NOW June data also shows that 60-day plus delinquencies increased from 3.0 to almost 3.1 million, foreclosure starts decreased from 257, 000 in May to 254,000 in June, and completed foreclosure sales increased from 83,000 in May to 94,000 in June.