Securitization

Citigroup expects to increase its loss mitigation staff by 500 new hires and take a one-time $50 million charge to comply with a federal consent order it signed to settle servicing and foreclosure shortcomings.

Citigroup has sold $10 billion of residential mortgages over the past five quarters as it continues to shrink its “bad bank,” which is known as Citi Holdings.

Single-family housing starts unexpectedly jumped 7.7% in March and the government revised upward its estimates of building activity in February and January by 23,000 units.

World Omni Financial Corp. filed a preliminary prospectus with the Securities and Exchange Commission (SEC) to issue a $716.8 million auto lease ABS under its World Omni Automobile Lease Securitization Trust 2011-A.

With the bulk of Kazakh transactions backed by diversified payment rights (DPRs) having been paid down over the past few years, it is refreshing to see that ATF Bank is extending the life of its outstanding DPR notes, even with only $100,000 left.

Turkey’s Denizbank is out with a $300 million structured deal consisting of five series, all scoring ‘BBB+(exp)’ from Fitch Ratings. West LB is the arranger. No word yet on whether private-sector investors are potential buyers but one market source said that a multilateral is buying at least a portion of the deal. In an interview with ASR earlier this year, Noel Edison of the European Bank of Reconstruction and Development had indicated that the institution would be funding additional Turkish banks this year via DPR programs following a deal in late 2010 with Garanti Bank.

The European Central Bank (ECB) is reportedly publishing a letter later this month outlining plans for a data warehouse of underlying loans that back ABS deals.

Scottish Re Group has entered into agreements to unwind the 2005 Orkney I securitization deal as well as to cede the Orkney block of business to Hannover Life Reassurance Co. of America.

Barclays Capital announced in an internal memo that Diane Rinnovatore will become co-head of securitized products origination (SPO) along with with Cory Wishengrad, who is currently co-head of SPO and head of the esoteric ABS origination group at the bank. He has been running the Barclays esoteric ABS business since late 2008.

Standard & Poor's stated that the U.S. Treasury's support of the two GSEs impacted its choice to revise the outlook on the U.S. long-term sovereign credit rating to negative from stable.

Legacy private-label RMBS market participants should take note: junior bondholders in certain vintages of low-rated nonagency RMBS have, in some cases, ended up with a payoff due to slow liquidation timelines, and a “rare” servicing transfer risk has surfaced, according to two recent rating agency reports.

If Fannie Mae and Freddie Mac are going to be prohibited from purchasing mortgages tied to properties with private transfer fees (PTFs), then the GSEs should create a database of these "hidden fees" fees to better protect lenders and consumers, according to the Consumer Mortgage Coalition (CMC).

To many in the industry, federal regulators just gave Mortgage Electronic Registration Systems (MERS) a big stamp of approval.

The new standard mortgage disclosure formfor borrowers will be tested starting next month, according to a report in the Wall St. Journal.

Fitch Ratings said that the securitization industry supports its plan to implement a more forward-looking, and countercyclical RMBS modeling framework. The model is based on projected home price movements where credit enhancement rises as risk enters the system and dips when the risk is neutralizing.

Bank of America Corp.’s agreement to pay Assured Guaranty $1.1 billion in mortgage put-backs sent bond insurer share prices up more than 20% on Friday.

As REITs emerge as a key source of agency MBS demand and become the marginal buyers for mortgage-backeds, spreads are still range-bound even though there is the news that the Treasury is unwinding its MBS portfolio, according to Bank of America Merill Lynch analysts in a report released today.

The mortgage insurance industry hopes that banking regulators recognize the value of their product when finalizing their ‘qualified residential mortgage’ (QRM) test — but so far their pleas have fallen on deaf years.

Sen. Sherrod Brown, D-Ohio, and Rep. Brad Miller, D-N.C., late this week introduced a comprehensive bill that would force mortgage servicers to act in the best interests of investors while pressuring them to engage in loan modifications.

Bank of America Corp. sent Assured Guaranty $850 million in cash Thursday as part of a $1.1 billion settlement on mortgage-related securities announced Friday. The out-of-court settlement is the biggest to date among municipal bond insurers.