Securitization

Performance on U.S. option ARM RMBS is probably going to continue its drop as $134 billion of these loans will recast over the next two years, Fitch Ratings said in a report released today.

Default rates on CMBS could hit 6% by yearend as the recession finally takes its toll on the performance of commercial and multifamily properties, the president of the Commercial Mortgage Securities Association (CMSA) said Tuesday.

Some agency MBS speeds seen slowing in the most recent prepayment reports may be bottoming out and could inch up slightly next time around.

H. David Sherman, a Northeastern University accounting professor who wrote a book on fair-value accounting published earlier this year, is already at work on an expanded edition. He has much to expand on, given all the pronouncements, proposals and debates on the fair-value issue that have cropped up in recent months.

FNMA prepayment speeds slowed a more than expected 16% in August versus an expected decline of 10%.

Lawmakers return from summer recess today with grand plans to overhaul the structure of financial services regulation, but they are up against a rapidly dwindling legislative calendar without a clear consensus on how to proceed.

In a notice to the Irish Stock Exchange yesterday it was disclosed that the U.K. tax authorities have notified the property managers of six of the nine properties in the WTOW 06-3 CMBS collateral pool that a 22% withholding tax will now be incurred.

Volkswagen announced it is looking to publicly syndicate an auto lease ABS deal out of the VCL series. It would be the first step toward reopening the European market after its year-long hiatus.

Markit appointed Richard Paddle as managing director and head of its European structured finance business. Paddle will be based in London.

Securitization data provider Lewtan Technologies opened a new office in New York City. This new location will allow the company to better serve its client base in New York and the surrounding area.

Warren Buffett's Berkshire Hathaway and Leucadia National Corp. have teamed up to buy Capmark Financial Group's struggling commercial mortgage servicing and production units for a reported $490 million.

Barclays has repackaged part of a $1 billion CLO portfolio that was downgraded two months ago into new triple-A-rated securities. The CLO is managed by Highland Capital Management.

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

The Russian bear still has an unmistakable limp. A fragile economy, spooked consumers and the absence of foreign investors are undermining the return of RMBS, but, given the brutal conditions, the performance of deals has held up relatively well.

Mexico's Metrofinanciera filed for a prepackaged bankruptcy with a court in Monterrey, Mexico, in mid-August and is waiting for approval. The originator has stopped making payment on a range of obligations.

Loan modifications aren't just important to the revival of the U.S. mortgage market. The U.K. too recognizes the importance of keeping borrowers in their homes and has devised several initiatives to push loan modifications through, although with less success.

With the GSEs solely supporting most of the MBS market, Fannie Mae's and Freddie Mac's future takes on added significance in saving the mortgage market from a total collapse.

After a steady stream of issuance in the consumer ABS market for the Term ABS Loan Facility's (TALF) past two subscription dates, industry pundits touted the success of the program for not only luring back investors but also bringing new issuers into the market. This includes a $940 auto loan ABS from first-time issuer GMAC's Ally Bank and a $703 million auto-lease deal for the August subscription date from Wheels, its second public U.S. securitization.

Fannie Mae and Freddie Mac are seeking significant revisions to a regulatory rule that forces them to submit all new products and activities for review, arguing it is too restrictive and goes against congressional intent.

Some U.S. states and cities have reportedly considered securitizations as a possible funding solution for budget shortfalls.