ABS

Mortgages saw improved funding and strengthening dollar rolls at the beginning of last week. This was because the world government programs were starting to get a foothold. U.S. one-month Libor dropped nearly 90 basis points over the previous week, and mortgages rallied sharply on Monday. Real money, hedge funds and servicers actively bought down-in-coupon.

The European securitization market could see some stabilization in pricing as the European Commission (EC) moves to adopt amendments to mark-to-market regulation.

The face of European securitization changes on an almost daily basis. Solutions drafted to solve the lack of market liquidity have been done on a country-by-country basis.

Although covered bonds are seen as a safer funding alternative for mortgages, there are still some hindrances to the growth of the sector in the U.S, according to participants at last week's Information Management Network ABS East conference in Hollywood, Florida.

The Department of Education (DOE) on Oct. 10 made amendments to its Loan Purchase Commitment Program and its Loan Participation Program. Under these programs, the DOE could purchase eligible FFELP loans that were made for the 2008-2009 academic year, or those originated after May 1.

Though paltry in comparison to previous quarters, credit cards continued to dominate new issuance in the consumer ABS market, as it has for the past year.

Government intervention and a move toward safer structures and collateral are making the current ABCP market a better place to be for issuers and investors alike.

The Troubled Asset Relief Program (TARP), which forms part of the Economic Stabilization Act of 2008, was a major focus at the Information Management Network's 14th Annual ABS East conference held in Hollywood, Florida, last week.

At the Information Management Network's 14th annual ABS East conference in Hollywood, Florida last week, it was easy to see that times are tough. However, it is still a pretty good time to be a credit card issuer, speakers said.

The Treasury clearly has a lot riding on the success of the TARP program, as it may be its last shot at restoring some semblance of normality to the markets.

Spirits were as low as the turnout on the first day of the 14th annual Information Management Network ABS East conference in Hollywood, Florida last week.

CLO market participants at the Information Management Network's 14th annual ABS East conference in Hollywood, Florida last week expressed confidence in the sector's long-term performance, despite the currently depressed spreads.

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

The Treasury Department is reviewing an Federal Deposit Insurance Corp. proposal, which includes using credit enhancements as a tool to encourage loan modifications.

After surging 52 basis points last week, 30-year fixed mortgage rates dropped back 42 basis points this week to 6.04%, according to Freddie Mac's weekly survey.

RealtyTrac reported a decrease in foreclosure activity in September. September saw foreclosure filings on 265,968 properties, a 12% drop from August.

The Federal Housing Finance Agency reported a 0.6% decline in its House Price Index for August. This compares to -0.8% reported in July. Year -over-year, the index is down 5.9%.

Radian Group promoted David Beidler, currently Executive Vice President and Chief Operating Officer of its principal financial guaranty subsidiary, Radian Asset Assurance, to President of Radian Asset, effective January 1, 2009.

Yesterday the largest ABS student loan issuer Sallie Mae reported that, despite credit market dislocation in 3Q08, its core student loan businesses were profitable while its total managed student loan portfolio performed within expectations.

Oak Hill Advisors hired Goran Puljic, T.K. Narayan and Scott W. Snell for the firm’s structured products group. The new hires will be focusing on investment opportunities in the credit markets.