Securitization

After months of infighting, the federal banking agencies have reached an agreement on risk retention standards that would include some new rules for servicers, according to sources familiar with the matter.

The excesses in mortgage lending happened primarily in the private market in 2004 when the GSEs lost market share to banks, said Bank of America Merrill Lynch analysts on a teleconference on housing reform.

PIMCO this week launched its Select U.K. Income Bond Fund that will invest in high-quality instruments across a broad range of fixed income sectors.

Federal regulators have drafted a 'qualified residential mortgage' (QRM) rule that mandates a 20% downpayment for such loans while leaving mortgage insurance totally out of the equation — a move that could prolong the housing recession in several states and decimate the mortgage insurance industry.

Conyers Dill & Pearman boosted its Moscow office by moving senior corporate and finance lawyer Claire McConway from its Bermuda location where she was an associate.

The amount of putbacks that Bank of America is being challenged for has grown to $84 billion. This covers 225 securitized deals, rising from $46 billion covering 115 deals in October, according to a Bloomberg report.

The recapitalization plan of Petroleo Brasileiro, designed to fund epic growth, is on strong footing, according to a release by Moody’s Investors Service.

Redwood Trust's recent $280 million RMBS is generally viewed as the Mill Valley, CA-headquartered firm's second attempt to jump-start the RMBS market, but doubts persist about whether it will be any more successful.

As the CMBS market begins to see a pickup in the new-issue pipeline, the increased competition among conduit originators has led to some erosion in underwriting quality.

The Obama administration's white paper on housing finance reform might have been short on details on how the government plans to initiate housing finance reform.

Although the Obama administration's white paper on housing finance reform came up short on details, it reemphasized the importance of the securitization market in the future of housing finance.

The joint Treasury/HUD report to Congress released this month was a major disappointment to market participants looking for a timely resolution to the status of the GSEs and the future of housing finance. While the white paper claims to lay out "the Administration's plan to reform America's housing finance market," it unfortunately amounts to a set of poorly defined policy options that will likely require years to codify and implement. Moreover, its core assumptions are unrealistic and ultimately border on wishful thinking.

Lawmakers laid out a series of ambitious deadlines in the Dodd-Frank Act, requiring regulators to complete roughly 170 new rules by July.

After waiting ten months, Redwood Trust issued a second Jumbo RMBS, injecting some optimism into the private-label mortgage securitization market.

A squabble over bragging rights for making the first whole business securitization since the financial crisis speaks volumes about Wall Street's ambitions for this slowly reviving asset class.

With economic growth in Argentina having surpassed 8% last year and unemployment diminishing, it is no wonder the country's consumer ABS sector boomed in 2010. Collateral, after all, was in generous supply as more optimistic consumers made purchases on credit. This year, observers said we should expect more of the same, although the pace of economic expansion is projected to be closer to half of last year's figure. Concern about rising delinquencies is moderate for now, and there's none of the bubble anxiety beginning to infect neighboring Brazil.

The Dodd-Frank Act's Section 939A prompts banking regulators to remove any "reference to, or requirements of reliance on, credit ratings" in their regulations and capital requirements. The uncertainty of how regulators will interpret those words has the ABS industry bubbling and proposals emerging.

Borrower behavior changes over time and investors and lenders should constantly adjust the way they utilize the different credit score values to accurately predict loan performance, according to officials from FICO and VantageScore.

Redwood Trust, the only firm to dip its toe back into the Jumbo MBS market, earned $15 million in the fourth quarter, a 63% decline from the same period a year earlier.

Tomorrow the European Central Bank (ECB) is set to extend its minimum two-rating requirement for all existing ABS to remain repo eligible at the central bank’s window. This effectively ends the grandfathering period that started a year ago.