ABS

A Fitch Ratings report on the outlook for increasing delinquencies in option ARMs resulting from recasts was released today.

Merrill Lynch has hired Michael Nierenberg from JPMorgan to head global mortgages and securitized products businesses as well as James De Mare from Citigroup to oversee the firm’s mortgage trading operations.

The number of mortgages approved in the U.K. in July 2008 fell by 71% year over year to 33,000 loans from 114,000 in July 2007, according to the Bank of England.

Morrison & Foerster has hired Stephen Birkett as a partner in its corporate group in Hong Kong.

A management shakeup at Fannie Mae has placed Peter Niculescu in charge of the single-family business and capital markets and named David Hisey, the new chief financial officer.

MBIA will reinsure $184 billion worth of Financial Guaranty Insurance Corp.’s U.S. public finance book, providing a boost to municipal bond holders and to FGIC’s statutory capital position, the companies announced Wednesday night.

Fannie Mae and Freddie Mac plan to exit from subprime lending in New York, according to published reports.

Newport Beach-Calif-based Pacific Investment Management Co. (Pimco), a top bond-investment manager, is canvassing the distressed debt market for opportunities, according to a report from Bloomberg.

Mortgage application activity increased just .5% in the week ending Aug. 22, with small gains made in both refinancings and purchasings.

The Mortgage Bankers Association appointed Jay Brinkmann as its chief economist and senior vice president for research and economics.

Guy Carpenter Co. has hired Cory Anger as head of global structuring for GC Securities, Guy Carpenter’s investment banking arm and a division of MMC Securities Corp. The new hire reports to David Priebe, head of the firm's global client development group.

After growing between $21 billion and $33 billion from April through June with annualized growth rates of 33% to 53%, Freddie Mac's retained portfolio increased just $6 billion, or 9.8%. Net retained commitments were essentially nil (negative $0.3 billion).

The Office of Federal Housing Enterprise Oversight (OFHEO) reported home prices based on their seasonally-adjusted purchase-only index declined 1.36% in the second quarter (5.44% annualized) following a 1.68% decline (6.72% annualized) in the first quarter.

The rise in delinquencies for the ABX indices was not surprising based on the roll rates and the 30-59 and 60-89 day delinquency pipelines. The 30-59 day delinquency bucket appears to be leveling off across each index. Prepayments also remained slow across all series.According to a Merrill Lynch report, prepays have slowed considerably from historical levels over the last few years. Analysts said that considering the limited refinancing opportunities available, they are commensurate with the environment. For example, according to Merrill, the 07-2 deals show 18% one- month CPR (voluntary plus involuntary) at 19 WALA, compared with 25% for their 06-1 counterparts at the same WALA. In a related report, UBS said that the 30-day DQ bucket, which they consider the leading indicator of ultimate defaults, restarted its upward trend after several months of mixed behaviour in which some indices were up while many others were down. As analysts pointed out in several earlier reports, 30-day delinquencies have a very strong seasonal component and because of that we expected to see rise in the summer months. The increases in other DQ buckets also support our

Mark Daly, Steve O’Connell and Guido van der Ven, previously senior vice presidents in Sallie Mae’s corporate finance department, have formed their new company called Education Investment Group (EIG).

The National Association of Realtors said that existing home sales bounced back to 5 million units annualized in July, a retraction from the entire June dip, which looks to have been more noise than substance.

The Federal Deposit Insurance Corp.'s (FDIC) Indymac systemic loan modification plan could have a widespread impact on bond holders, according to a recent report from Barclays Capital.

Citigroup plans to revamp its capital markets business under its investment-banking arm.

Fitch Ratings presents its asset-level projected loss analysis (PLA) to quantify loss expectations on structured finance (SF) CDOs.

The market is grossly mispricing heavily defeased CMBS, although it is true that the illiquidity and weak technicals make it difficult to trumpet relative value in the current