ABS

CIBC recently considerably reduced its remaining exposure to U.S. residential mortgages through a fund arranged by Cerberus Capital Management. Cerberus agreed to invest $1.05 billion in cash in CIBC's U.S. residential real estate portfolio.

As deteriorating economic conditions continue to pound the structured finance markets, financial institutions across the board are looking to either shed assets from their deflated portfolios or take advantage of undervalued securities.

Europe has for months stood unified in its public position that it will be able to withstand the developing financial maelstrom because its banks are healthier than U.S. banks. Over the past few days, however, that position has changed.

When compared to the steep decline in issuance of other forms of ABS this year, and the broad sweep of the credit crisis, market conditions for debt backed by card receivables have held up quite well.

The U.K. Treasury announced today that a new expert liaison group on banking will be set up.

The regulator of Fannie Mae and Freddie Mac Thursday morning suspended capital classifications for the two GSEs, which have been operating under government control since early September.

The Treasury Department started purchasing agency MBS in September and Fannie Mae and Freddie Mac will be increasing their MBS purchases to support the housing market, according to Treasury secretary Henry Paulson.

The nationalization of Icelandic banks, Landsbanki and Glitnir, and the subsequent delivery of their balance sheets could affect certain U.K. CMBS transactions, according to a Barclays Capital research note published today, .

Despite getting an increase in the liquidity support originally pledged toward saving Hypo Real Estate (HRE), Pfandbriefe tied to the bank continue to suffer from disruptive pricing, Dresdner Kleinwort analysts said. The increase was to €50 billion ($68.4 billion) from €35 billion.

Mortgage Strategist, which is a weekly publication from UBS' investment research division, will halt publication, according to sources familiar with the situation.

The Department of Housing and Urban Development (HUD) recently issued guidelines for the Home for Homeowner (H4H) program. This was part of the Housing Bill that was signed into law in July that authorized $300 billion for the FHA to use to insure and refinance delinquent mortgage loans.

The Securities and Exchange Commission (SEC) added details on the process and initial steps that the SEC has undertaken to conduct a study on "mark-to-market" accounting, as authorized by Sec. 133 of the Emergency Economic Stabilization Act of 2008, signed into law by President George Bush last Friday.

The U.K. government said today that it will take action to protect the retail depositors in two Icelandic owned banks: Icesave, a U.K.-based branch of Landsbanki and Heritable, a U.K.-based banking subsidiary of Landsbanki.

Asset managers interested in working for the Treasury Department will have to submit a proposal to handle either whole loans or mortgage-backed securities by 5 p.m. EST Oct. 8.

The Federal Reserve Board has created the Commercial Paper Funding Facility (CPFF), which is a facility that will complement the Fed's existing credit facilities to help provide liquidity to term funding markets.

The more interesting story about September prepayments was it was in GNMAs where speeds increased more than expected : 8% versus 1%. 2007 vintages were sharply higher in 5.5s, 6s and 6.5s surging a respective 80%, 63% and 28% from August's average.

O’Melveny & Myers hired two transactions lawyers, Kenneth Yellen and Demetrios Xistris in the firm’s investment funds and securitization practice. Yellen joins the firm’s Washington, DC office as partner, and Xistris join the firm’s New York office as senior counsel.

The Canadian Securities Administrators (CSA) issued a consultation paper today outlining several securities regulatory proposals related to the Canadian nonbank sponsored ABCP market. This paper comes out of an ABCP working group set up to address regulatory issues relating to the current credit crisis.

Markit announced that the following indices have rolled into new series:

Friedman, Billings, Ramsey Group (FBR Group) said that various articles have been published recently regarding the attempt by FBR Group to have an agency mortgage security with a face amount of $250 million returned to it under a repurchase agreement with Lehman Brothers.