Securitization

Three to four years removed from the time non-Agency RMBS and housing markets began to collapse, this article provides a historical performance update of the subprime loan sector for vintage years 1997 through 2008. Performance of the 2005, 2006, and 2007 vintages is far and away worse than for any other year, even prior to 2000 when subprime lending was still fairly new. In addition, the extent of negative equity in the borrower repayment pipeline for never-modified and at-least-once-modified subprime loans for the 2005, 2006 and 2007 vintages is measured. Given the extreme and broad corrections in residential property prices since approximately mid-2006, the mortgage repayment struggles of borrowers, and the intended effects of loan-modifications, negative equity density has been pushed to the performing and early-stage delinquency end of the pipeline. That is, modifications have resulted in a larger share of performing (active and current) borrowers with significantly more negative equity than otherwise would be the case had a loan modification not occurred.

Manager Activity: Autos Book Runner Amount (US$ Mil) Rank Mkt.

Although there is a lot of talk on renewable energy, specifically solar financing, in the esoteric space, there are other assets giving the non-traditional sector life.

The business of originating and servicing second liens continues to struggle with lenders cutting back on production and allowing their receivables to run off, according to new figures compiled by ASR sister publication National Mortgage News (NMN) and the Quarterly Data Report (QDR).

Years ahead of when it is due to be implemented, it's already clear that the Basel III accord will be plagued by serious trust issues.

In a best case scenario, consumers might save upwards of $63 billion a year if Fannie Mae and Freddie Mac participated in a workable refinancing program for underwater borrowers, according to a new report from Moody's Investors Service.

In a memorandum and order filed today, U.S. sourthern district of New York court judge Barbara Jones granted Morgan Stanley's motion to dismiss Retirement System of the Government of the Virgin Islands' class action suit against the bank.

Even though GSE and Federal Housing Administration (FHA) loan limits will decline to $625,500 at midnight Friday, borrowers with high balance FHA-insured loans can still refinance these products as long as they don't engage in a cash-out refinancing.

Irvine, Calif-based Carrington Mortgage Services some time this month is expected to issue its first GNMA security, one company official told ASR sister publication National Mortgage News recently. Carrington is a fast growing retail/wholesale lender.

DoubleLine Capital's the DoubleLine Funds Trust launched the DoubleLine Low Duration Bond Fund.

Santander Consumer is in the market with an auto deal under its Santander Drive Auto Receivables Trust 2011-4. The company filed with the Securities and Exchange Commission (SEC) for a $750 million offering.

Banks in Europe will try to unload roughly 15 billion euros ($20 billion) of loans secured by commercial real estate in Europe through 2012 as they comply with tighter capital regulations, according to Situs Companies, a debt advisor.

Cortview Capital Holdings Inc. plans to dissolve the commercial mortgage-bond team led by Bill Green, after hiring the group only six months ago, according to a Bloomberg report.

The recent weakness in the credit markets means European CMBS issuance isn't likely to pick up significantly anytime soon, according to Standard & Poor's report.

The second edition of Mortgage-Backed Securities: Products, Structuring, and Analytical Techniques was recently released by John Wiley & Sons.

Babson Capital Management has closed a $500 million CLO, its first since the financial crisis, the Springfield, Mass.-based firm said today.

Moody’s Investors Service in a recent report warned of the danger posed to Hungarian covered bonds of a Sept. 19 law that allows mortgages denominated in foreign currency to be repaid in Hungarian forints. The exchange rate for the switchover represents a discount from the prevailing one.

Another auto-related deal is coming to the market. World Omni Financial Corp. filed an S-3 filing with the Securities and Exchange Commission (SEC) to issue a securitization under its World Omni Automobile Lease Securitization Trust.

Standard & Poor's, Moody's Corp. and Fitch won dismissal of a lawsuit alleging that their ratings of nonprime MBS were faulty and caused five Ohio public employee pension funds to buy into these money-losing investments.