Securitization

Helios Capital, LLC, has completed $30 million in mortgage loan transactions in the Tri-State area and Florida over the last seven months.Helios Capital, LLC, has completed $30 million in mortgage loan transactions in the Tri-State area and Florida over the last seven months.The New Jersey-based commercial loan advisory firm was founded in January of this year by Jonathan Horn, senior managing director, and Josh Malka, managing director. The two are former New York-based private equity managers. The firm is also an affiliate of Onyx EquitiesHelios specializes in individual loan and portfolio sales in the secondary market for the acquisition and disposition of commercial mortgage loans. It also aims to facilitate and make the bank loan trading process between financial institutions and investors more efficient.The firm recently closed three deals that contribute to its small balance commercial loan transactions. The first deal completed in Brooklyn, New York, totaled $3.5 million for a mixed-use, multifamily building comprised of five residential units and a 5,000-square-foot medical office space sold to one of Helios’ private investors.Another deal completed in Harlem, New York, totaled $2.449 million for the structured sale of a 24 unit multi-family building.A third deal completed in Wenonah, New Jersey, totaled $2.3 million for a 35 unit multi-family building in Gloucester County on behalf of a local bank.Helios Capital, LLC, has completed $30 million in mortgage loan transactions in the Tri-State area and Florida over the last seven months.Helios Capital, LLC, has completed $30 million in mortgage loan transactions in the Tri-State area and Florida over the last seven months.

Bank of New York Mellon Corp.'s agreement Wednesday to buy Insight Investment Management Ltd. for $387 million from Lloyds Banking Group PLC could force some of the other large custody banks to step up acquisition efforts.Based in London, Insight Investment specializes in so-called liability-driven investment solutions, active fixed-income asset management and alternative asset management. Founded in 2002, it is the third-largest manager of U.K. pension funds. The deal would add$131.9 billion in assets under management for Bank of New York Mellon.Ronald P. O'Hanley, the president and chief executive of BNY Mellon Asset Management, said that when the deal is completed it wants to offer Insight's services in other markets, including the United States, Germany and Japan."For the foreseeable future, they will be the dominant player in LDI solutions in the U.K., but given our position in other markets, we see an opportunity to broaden what we offer to existing clients globally with these capabilities," he said. LDI refers to management of liabilities for pension plans, insurance companies or foundations.Andrew Marquardt, an analyst at Fox-Pitt Kelton Cochran Caronia Waller, said that, on its face, the deal is relatively small. It would add 14% to Bank of New York Mellon's assets under management to give it $1 trillion, but he said it could hasten the other three large trust banks to respond with deals of their own. He said all three are well capitalized and could be ready to buy."I think BNY Mellon, Northern Trust and State Street have been pretty consistent in their thought process — everyone wants to be opportunistic," Marquardt said.But making deals will not necessarily be easy, he said. "I think everyone is always interested in deals, but there are higher hurdles because of the uncertainty in the markets," he said.O'Hanley said he expects banks to make more asset management acquisitions this year. "Whenever you go through a period of stress, it tends to lead to deals," he said. "I think there will be more deals, but I don't know that there are more buyers out there, though private equity seems extremely interested."Industry executives have been debating whether now is the right time to aggressively pursue wealth management acquisitions. Some have advocated acquiring now to take advantage of ready capital and lower prices. Others have advocated a wait-and-see approach.Analysts said regardless of how cautious they may appear, companies are always looking to buy. "For the right price there is always an opportunity," said Rus Prince of Prince & Associates in Shelton, Conn."The issue is pricing more than anything right now. Interest in acquiring has started to quietly intensify in the last six to eight months. People are saying they aren't going to buy, but they are still looking all over the place for the right deal."According to SNL Financial, there have been 32 asset management acquisitions during the first seven months of this year, including BlackRock Inc.'s acquisition of Barclays Global Investors from Barclays PLC. There were 41 asset management acquisitions during the first seven months of last year.Marquardt said it is an attractive time for large financial services companies to buy asset managers because "it makes sense to buy something that diversifies revenue and is less capital-intensive." He said he expects more such deals this year. For example, Bank of America Corp. continues to shop Columbia Asset Management."The primary areas of focus for growth via acquisition is asset management and asset servicing businesses," Marquardt said. "These deals are a good indication that capital has been rebuilt and they are comfortable with where they stand."Burton Greenwald of BJ Greenwald Associates in Philadelphia said he expects more deals "if this market remains at current levels or equity prices continue to move upward.""You are probably entering a more realistic world to make deals," he said. "When markets took such a beating, asset managers were reluctant to sell at such low multiples. Now, prices are getting back to normal and we should see more deals."Bank of New York Mellon Corp.'s agreement Wednesday to buy Insight Investment Management Ltd. for $387 million from Lloyds Banking Group PLC could force some of the other large custody banks to step up acquisition efforts.

Noting improvements in many sectors of the economy, the Federal Reserve Board's policymaking committee said Wednesday that it would complete its planned $300 billion of Treasury securities purchases by October.The Fed announced the purchases in March to thaw stubbornly frozen credit markets, and Wednesday's announcement represents the central bank's latest efforts to return to a degree of normalcy. In June the Fed said it would stop auctioning off Treasury securities and also ended some support to money market mutual funds.Wednesday's policy statement made no mention of other liquidity programs the Fed continues to run, including the Term Asset-Backed Securities Loan Facility, which is still slated to expire at yearend.Policymakers said the overall economy is "leveling out" and expressed confidence that the Fed's efforts to support financial institutions, coupled with other monetary policy actions and the Obama administration's stimulus package, could lead to growth.Noting improvements in many sectors of the economy, the Federal Reserve Board's policymaking committee said Wednesday that it would complete its planned $300 billion of Treasury securities purchases by October.Noting improvements in many sectors of the economy, the Federal Reserve Board's policymaking committee said Wednesday that it would complete its planned $300 billion of Treasury securities purchases by October.

WASHINGTON — After several consecutive quarters of disappointing results, net income at the 12 Federal Home Loan Banks surged 56.4%, to $1.1 billion, according to figures released by the Office of Finance Wednesday evening.The growth comes thanks to accounting rules approved earlier this year that require only small, credit-related portions of other-than-temporary impairment charges to be recorded against earnings. Total OTTI charges on the system's private-label mortgage-backed securities came to $2.6 billion during the quarter but only $437 million of that was taken against net income.The new standard placed some perennially struggling Home Loan banks back in the black. The Federal Home Loan Bank of Chicago, which lost $39 million during the first quarter and reported losses during three of the four quarters in 2008, pulled in $103 million during the second quarter.The Home Loan banks in San Francisco, Atlanta, New York, Topeka and Chicago were the top five earners during the quarter.Still, the Home Loan banks in Seattle and Boston continued to lose money. The $35 million quarterly loss in Seattle marked that bank's fourth consecutive deficit. Losses at the Boston Home Loan bank surpassed $83.4 million during the first quarter but shrank to $5 million by June 30.The overall earnings gain comes despite a 20.4% drop in advances, which is the system's main business. With the liberalization of the Federal Reserve Board's discount window and a number of liquidity programs sponsored by the central bank, members of the Home Loan banks have more sources than ever from which to tap funding.The system's combined balance sheet lost 14.9% from yearend, with total assets coming in at $1.1 trillion.Retained earnings at the 12 banks totaled grew roughly 20% during the quarter, to $6 billion.WASHINGTON — After several consecutive quarters of disappointing results, net income at the 12 Federal Home Loan Banks surged 56.4%, to $1.1 billion, according to figures released by the Office of Finance Wednesday evening.

According to a Fitch Ratings survey, the majority of senior credit investors in Europe believe that the markets are past the worst of their disruption.

Fitch Ratings confirmed the ratings of 40 covered programs according to its new liquidity requirements that took effect on July 7th.

Jefferies made eight appointments within the investment bank’s MBS and ABS group, which is part of the fixed income division at the firm.

The index showed that delinquencies have receded in recent months. This indicates that moderate improvement in default activity is possible for the rest of this year. Fitch director Brad Sohl said that while delinquency and default performance of timeshare receivables is weak relative to the past — and up 37% year-over-year — credit enhancement should result in limited negative rating actions. Total delinquencies decreased from February’s all time high of 5.58% to 4.89% in 2Q09. Monthly defaults of .88% for June — the highest observed level for the index — are up nearly 48% from last year’s .52%. Also, default reached 8.75% for the index in June. However, Fitch expects default levels to moderate slightly in the coming months, in light of recent downward delinquency trends.Fitch’s outlook for asset performance is that it will likely deteriorate, although the ratings will remain stable. The Fitch timeshare performance index, which summarizes average monthly delinquency and gross default trends tracked in Fitch’s database of timeshare ABS, is available on a quarterly basis.Total defaults on U.S. timeshare ABS hit another peak in the second quarter, according to Fitch Ratings timeshare ABS index.Total defualts on U.S. timeshare ABS hit another peak in the second quarter, according to Fitch Ratings timeshare ABS index.

Catastrophe bond issuance has jumped this year, after a complete standstill during the second half of 2008.

Ocwen Loan Servicing has inked a deal to be the interim servicer for Freddie Mac on 24,000 nonperforming single-family loans with a principal balance of $4.4 billion.

Freddie Mac forced its seller/servicers to buy back $951 million of bad mortgages during the second quarter, a 21% increase from the first quarter.

Rising interest rates contributed to a declining Mortgage Bankers Association (MBA) Market Composite Index for the week ended Aug. 7 when compared with the previous week, but continued increases in purchase activity suggest a housing recovery could help bolster volumes going forward.

Barclays Capital analysts said that a new German law designed to give bondholders more rights and flexibility missed a chance to provide some much needed clarity on the future of securitizations.

RMBS broker-dealer Amherst Securities Group hired Jim Regan as the head of ABS trading.

Two years after it abruptly stopped funding loans, Impac Mortgage Holdings Inc., once a leader in the now-defunct alternative-A market, is coming out of hibernation.The Irvine company has outlived other once high-flying Southern California home lenders like New Century, IndyMac and Countrywide. "We are the last guys standing," said Joseph Tomkinson, Impac's chairman and chief executive.Since August 2007, Impac has confined its activities to reducing debt, servicing the loans it made and starting a handful of side businesses. It is down to 300 employees, one-quarter of its work force at the height of the housing boom in 2006.But Tomkinson said Impac "is getting ready to enter the retail [lending] market in a big way." The company is negotiating a $500 million warehouse line it expects to get by yearend and says it expects to start originating loans next year.Unlike the reduced-documentation mortgages that Impac specialized in during the fat years, it intends to write plain-vanilla loans this time around."The product that is being originated today is some of the best product that's been originated in years," Tomkinson said. "You're underwriting with property values back to 2002, and everything is fully documented."In 2006 Impac wrote $2 billion of loans. But the liquidity crisis began late that year, forcing it to retrench. By mid-2007 it was on pace to originate just $300 million for the year. A few months later it halted lending altogether.Todd Taylor, Impac's chief financial officer, said it survived largely because it managed to negotiate out of its five warehouse lines and sell most of its loans at a loss in 2007, while margin calls were crippling other lenders. The company still owes $171.7 million to UBS AG on a warehouse line that was converted to a term loan. This is the last of Impac's significant liabilities, Taylor said.Impac's stock was delisted from the New York Stock Exchange last year and now trades on the Pink Sheets.During the interim Impac has set up five fee-based businesses: a real estate brokerage, an escrow business, a loan-modification service, a company that looks after repossessed homes and one that disposes of them. Tomkinson said these businesses "are all earning money."The company is also looking to buy a title insurer. Such an acquisition, along with the five fee businesses and a revived lending business, "will all feed off each other," Tomkinson said."If I prequalify somebody for a loan, I send them to a broker, sell them a house, send them to our title insurer and fund the loan," he said. "All of these things interplay with one another."To be sure, Impac has tried to reinvent itself before. Last year it talked about buying distressed loans, and it acquired a platform from UBS for servicing them. But Impac later sold the operation to York Capital Management LLC."If you're considering getting back into the mortgage business, you have to fashion a long enough runway and have plenty of capital because it's not going to be as fast a takeoff as most people think," said Bill Dallas, whose Ownit Mortgage Solutions Inc. was among the first high-profile casualties of the mortgage crisis. "They're trying to figure out how to build a profitable business in this environment, and it's not that easy."In particular, Dallas cited the current difficulty in obtaining warehouse lines, particularly from banks that are also competitors in originating mortgages. "They have to sell their loans and warehouse their loans, and the competitor is a bank that is turning the spigot off," he said.It probably does not help matters that two of the few remaining warehouse lenders — Colonial BancGroup Inc. and Guaranty Financial Group — have warned in recent weeks that they may fail.Taylor acknowledged that warehouse lines (which Impac itself once offered to its correspondents) are "very hard to come by because there's no liquidity."Impac services 57,000 loans, totaling $6.5 billion. It has modified roughly 5,000 of them since January. But it is not participating in the Obama administration's loan-mod program, which Tomkinson said is "exacerbating the situation," because it encourages servicers to modify loans for borrowers "who don't have any skin in the game."To make sure only borrowers intent on paying get a break, Impac charges a fee of up to $2,000 for a completed loan modification. Tomkinson noted that many "other groups" charge fees up-front before determining whether the borrower qualifies for a modification."The borrower has to take some responsibility," he said. "We charge a fee if the borrower is qualified, and it's on a sliding scale, so there's no up-front money, and only if they are successful in getting the modification after reunderwriting the loan. Any borrower willing to put more cash up is sincere."Two years after it abruptly stopped funding loans, Impac Mortgage Holdings, once a leader in the now-defunct Alt-A market, is coming out of hibernation.

Trepp expanded its commercial real estate platform to include daily commentary and market observations under the TreppWire banner.

A legal reserve created by State Street Corp., Boston, to deal with law suits filed against the company over subprime mortgage investments by one of its subsidiaries may not be large enough to cover what the company might eventually have to pay out.

Citigroup, which has not been an active warehouse lender in recent years, said Tuesday it has earmarked $2 billion in funds for warehouse lending commitments to non-bank mortgage lenders.

Fitch Ratings believes it is likely that iStar Financial — a large player in structured financing for commercial real estate — will go into default on its obligations given its weakened financial position.

Standard & Poor's is requesting comments on its proposed stressed recovery ratings for all senior tranches of U.S. prime, Alt-A, and subprime RMBS that it originally rated at 'AAA' but has downgraded to 'BB+' or below.