Securitization

For the mortgage insurance industry the writing is on the wall: The Federal Deposit Insurance Corp. and its regulatory brethren will not recognize the value of mortgage insurance coverage in determining a QRM.

The Federal banking regulators started leaking their mortgage risk retention rules yesterday afternoon.

One of the most important pieces of the Dodd-Frank Act is set to start falling into place Tuesday as regulators offer a plan that would establish stringent underwriting standards for most mortgages, provide limited new rules for servicers, and detail how institutions must retain some risk of loans they intend to sell to the secondary market.

Walter Investment Management Corp. on Monday agreed to buy Green Tree Servicing, St. Paul — a specialty servicer — and its parent company in a deal valued at just over $1 billion.However, the buyer is putting up very little in the way of cash. To complete the purchase, Walter Investment will issue 1.8 million shares of common stock to the seller, assume $20 million of existing Green Tree debt, and issue $765 million of new debt.

Educational Funding of the South (Edsouth) is in the market with its 2011-1 Series FFELP-backed student loan ABS deal. The offering is divided into Class A-1 and A-2 as well as Class B notes, which amount to around $1.6 billion ,according to a presale report released by Moody's Investor Service.

Although the current syndicated loan and high-yield debt markets are booming, they remain largely unavailable for “turnaround” situations and lower middle-market borrowers seeking to raise funds, according to the Financial Restructuring Quarterly Update report Morgan Joseph TriArtisan issued on Monday.

The drive to reform the GSEs is raising two questions that could fundamentally reshape the way borrowers obtain mortgages: will a revamp effectively eliminate the 30-year fixed rate mortgage, and would that be a good thing?

The National Credit Union Administration (NCUA) last week indicated it would proceed with litigation against major Wall Street financial institutions unless some $50 billion in MBS are refunded.

While default and deferral rates for U.S. bank trust preferred security CDOs remain flat, the sector saw a first last month when a tender offer was accepted in connection with a CDO, according to Fitch Ratings.

Pending home sales climbed 2.1% to a reading of 90.8 in February, according to a report released Monday by the National Association of Realtors (NAR).

Four states are considering legislation that would prohibit or restrict appraisers from using distressed sales, such as those of foreclosed properties, as comparable sales when assessing the value of a home.

K&L Gates hired Howard Goldwasser and Xavier Ruiz for its New York office as partners in the finance and corporate practices, respectively.

KGS-Alpha Capital Markets hired Mark Noble as head of structured corporate and agency debt and Jim Tymeck as the new head of the finance desk.

Clayton Holdings formed an independent financial analysis and consulting group and hired a team of structured finance professionals based in New York City to run the practice.

The American Securitization Forum (ASF) opened a Washington, D.C. office in an effort to further its advocacy efforts on behalf of the securitization markets.

Loss severities rose across the board for all the indices in the lastest ABX Remittance reports, according to a report from Bank of America Merrill Lynch.

Not only are state attorneys general pushing the nation's megabanks to sign a servicing settlement tied to faulty foreclosure practices, but they want these institutions to sign a regulatory consent order, holding their boards' responsible for correcting deficiencies.

Fitch Ratings has placed 41 tranches of Portuguese structured finance transactions on Rating Watch Negative (RWN) following the lowering of Portugal's long-term foreign and local currency issuer default ratings to 'A-' from 'A+' on March 24.

This week’s U.S. Treasury announcement that it will be selling up to $10 billion per month of its $140 billion MBS portfolio came as a surprise to most MBS market players.

Business development companies, closed-end funds that invest in the debt and equity of private companies, took their lumps during the credit crisis, but they are suddenly hot commodities.