ABS

The Federal Deposit Insurance Corp. (FDIC) is preparing for a "test sale" of troubled real estate loans under its new 'Legacy Loan Program' and wants to send the mortgage package to investors by next month.

GMAC Financial Services said first quarter residential loan production rose 61% to $13.2 billion on a sequential basis at its mortgage units but declined 29% compared to the same period last year.

TCW Asset Management has been selected to manage an opportunistic MBS portfolio for the Pennsylvania Public School Employees' Retirement System (PSERS), confirmed Evelyn Tatkovski, spokeswoman for the $45.4 billion plan.

Fitch Ratings placed 132 subordinate FFELP student loan ABS tranches on Rating Watch Negative.

The last chance for bankers to voluntarily modify mortgages may be at hand.

Chase priced a $5 billion credit card transaction with JPMorgan Securities as sole lead.

Thornburg Mortgage of Santa Fe, N.M., filed for bankruptcy protection late last week, listing debts of more than $1 billion.

Senate Democratic leaders want to pass an Federal Deposit Insurance Corp. (FDIC)/housing bill on Tuesday but first they have to wade through a number of amendments including one that would require a temporary shutdown of the Federal Housing Administration (FHA) single-family program if it is headed toward insolvency.

Investors are facing both increased extension and call risk at the moment. For these buyers, Barclays Capital suggested stripped down 10/20 IOs because they allow the creation of lower priced bonds, which helps fight premium erosion. Meanwhile, the higher WAC protects against extension risk.

Amherst Securities Group hired a team of MBS and ABS salespeople at its Chicago office.

Manager Activity: AutosFull Credit to Book (Equal if Joint) U.S. Public ABS Market/144A Market

Mitsubishi Motors is in the market with an auto deal led by Banc of America Securities.

GE Capital is in the market with a $1.27 million private label credit card transaction. The deal is led by Banc of America Securities and Deutsche Bank Securities.

The government has delayed a planned release of stress test results of the 19 largest banks until May 7, according to a government official.

An MBIA subsidiary and LaCrosse Financial Products have filed a lawsuit against two Merrill Lynch entities for misrepresentation and breach of contract in connection with credit default swaps tied to subprime residential mortgages.

Accredited Home Lenders of San Diego, once a top ranked subprime lender, is expected to file for bankruptcy protection in Delaware, perhaps as soon as this afternoon, according to a source close to the matter.

The necessary post-mortem analyses for the financial system's collapse have begun in earnest. While some have taken to talking about Wall Street's "stupidity," this is an unsatisfying and ultimately counterproductive approach. Clearly, the financial crisis had numerous major and contributing causes (the true "perfect storm"), but failures of models and analytics were key factors.

Among the victims claimed by the global financial crisis, a number of Kazakh banks have been particularly ravaged. Having borrowed heavily abroad and made hefty gambles on local real estate, much of the country's finance industry is flailing.

The European real estate market's lack of liquidity is as much a result of the disappearance of competent intermediaries as it is of the credit crisis.

Critics can say what they want about TALF.