Securitization

The U.S. economy and housing market have stabilized, leading to a rally in some sectors of ABS and MBS.

With financial reform bills that already surpass the 1,000-page mark, it would be hard to imagine any subject left untouched by the effort on Capitol Hill to overhaul financial services.

Reports about the death of CMBS have been exaggerated, it appears. Following a year of inactivity, issuance from three single-borrower CMBS deals has hiked up expectations for the sector heading into 2010.

Much of the blame for the housing bubble and the subsequent recession has been attributed to the growth in subprime lending between 2002 and 2007. However, a simultaneous development of broader importance was the steady relaxation of affordability standards, which allowed prospective home buyers to qualify for increasingly large loans.In concert with the growth in the subprime market, lenders' tinkering with time-honored underwriting metrics eventually linked the two sectors in a massive feedback loop that distorted both real estate prices and the mortgage markets.

Since mid-2007, the European securitization primary markets have been living in a state of suspended animation.

With the safe harbor from the Federal Deposit Insurance Corp. (FDIC) and Term ABS Loan Facility (TALF) in place until March, there are near-term positive expectations for the ABS market going into the New Year, market sources said.

WorldVest will launch WorldVest Brasil Finance FIDC or the WVB Finance FIDC as its first investment vehicle to participate in the Brazilian consumer finance market.

The mortgage loan modification scheme launched on Dec. 18 by the Italian Banking Association (ABI) could have a negative impact on Italian RMBS ratings if issuers implement it without correcting for potential distortions which could affect standard RMBS structural features, said Fitch Ratings.

The Fire and Police Pension Association (FPPA) of Colorado has added a new investment to its portfolio.

A new mortgage disclosure rule may initially do the opposite of what the Department of Housing and Urban Development (HUD) intended.

Aided by one extra day in the holiday shopping season, retail spending between Nov. 1 and Dec. 24 rose an estimated 3.6% compared with a year earlier, according to the MasterCard Advisors SpendingPulse report.

To expedite sales of foreclosed properties, Fannie Mae said it will accept a buyer's purchase offer without notifying the servicer and before it determines whether the lender has to reimburse the secondary market agency for any losses.

GMAC is in line to get an additional $3.5 billion in assistance from the Treasury Department to cover mortgage losses from its troubled Residential Capital (ResCap) unit, according to published reports.

CapitalSource of Chevy Chase, Md., said Tuesday that it has raised $119 million by mortgaging some of the long-term-care properties it previously agreed to sell to Omega Healthcare Investors.

DoubleLine, the brainchild of former The TCW Group high-yield fixed-income CIO Jeffrey Gundlach, can now call itself a registered investment adviser after receiving approbation from the Securities and Exchange Commission (SEC) last week.

Standard & Poor’s has cut the ratings on 156 CLO tranches totaling $10.44 billion.

Part one of our examination of prospectuses for recent credit card securitizations focused on higher-end balance activity among the top issuers (see StructuredFinanceNews.com for article titled Dissecting Issuer Accounts posted Dec. 28). In this installment, it's lower-balance accounts' turn.

Now that it has emerged from bankruptcy, CIT Group has learned firsthand the same lesson other nonbank lenders have: the key to survival is to be more like a bank.

Fitch Ratings has downgraded 293 classes and affirmed 246 classes in 82 U.S. scratch and dent RMBS transactions.

The Government Employees' Retirement System (GERS) of the United States Virgin Islands filed a $1.2 billion suit against Morgan Stanley last week for allegedly pillowing CDO ratings and marketing investment products it expected to fail.