Securitization

The new Spanish government fund Fondo de Adquisicion de Activos Financieros (FAAF) will start operations this week.

Aggressive rate cuts over the past week - the Bank of England's (BofE) 150 basis points easing along with the European Central Bank's 50 basis points cut - are likely to improve loan affordability in existing household credit.

The Spanish government announced the launch of a mortgage deferral measure to aid unemployed, old-age pensioners and self-employed borrowers struggling to pay their mortgages. Although the move could potentially bailout a significant number of struggling homeowners, there could be a potential downside for existing Spanish RMBS deals.

The automotive sector was in the spotlight last week. House Speaker Nancy Pelosi called for an emergency and limited financial assistance package for the beleaguered industry. President-elect Barack Obama also asked for immediate help for the automobile companies.

Recent events in the financial markets have highlighted the importance of parties to a 1992 Master Agreement1 understanding the termination mechanics following an event of default. It is now more vital than ever for the Non-defaulting Party to have a clear and effective close-out mechanism to replace the terminated derivative transaction as quickly as possible.2 In contrast to a Termination Event, which may be triggered without the fault of either party and is designed to close out a Transaction following an event that substantially alters the Transaction's economic profile, an Event of Default arises where the fault of a party triggers termination. The purpose of this article is to briefly examine the consequences of an Event of Default and the subsequent process by which the Non-defaulting Party can terminate an Agreement.

The ABS market suffered yet another week of frozen new issuance and paltry trading activity in the secondary market.

The Federal Housing Finance Agency (FHFA) announced a new streamlined loan modification program last Tuesday.

Resecuritizations or ReREMICs are following the trajectory of the ABS market pretty closely.

Manager Activity: AutosFull Credit to Book (Equal if Joint) U.S. Public ABS Market/144A Market

The two financial guarantors who have remained relatively spared from the crisis are now coming together.

Standard & Poor's, in a new report, predicts that subprime losses on 'AAA' rated mortgage bonds may not be as bad as some are projecting.

Fannie Mae and Freddie Mac have adopted a "streamlined" approach to modifying delinquent mortgages that regulators and industry groups hope will be accepted by investors in private-label nonprime mortgage-backed securities.

The federal government should consider extending a lending facility to non-bank mortgage servicers to avoid "significant disruptions" if they run short of funds in making advances on delinquent mortgages, according to the American Securitization Forum.

Syncora Holdings expects to report a third-quarter net loss of $1.3 billion, up from a net loss of $89.9 million in the third quarter of last year, it said in a filing with Securities and Exchange Commission (SEC) this morning.

Treasury Secretary Henry Paulson today said that buying troubled assets will no longer be the focus of the financial rescue package.

Genworth Financial hired Ronald Joelson as its new chief investment officer, with responsibility for managing Genworth's nearly $70 billion investment portfolio.

Citi has joined other lenders in offering streamlined workouts to home loan borrowers who are at risk of default.

Thornburg Mortgage continued to take losses on securitized loans in the third quarter, but was able to offset them with gains related to its senior subordinated secured notes, a principal participation agreement and warrant liability to produce a $140 million profit for the period.

The credit performance of Fannie Mae's guaranteed nonprime mortgages continued to deteriorate and the percentage of seriously delinquent Alt-A loans jumped over 100 basis points during the third quarter to 4.92%.

Moody's Investors Service reported in its U.K. credit card index report for September 2008 that the U.K. credit card ABS sector will witness deterioration over the next coming months despite relatively stable credit card indicators reported in September 2008.