Securitization

To counter rising mortgage rates, the National Association of Realtors is urging the Treasury Department to "aggressively" increase its purchase of Fannie Mae and Freddie Mac MBS.

Alternative energy has permanently entered mainstream discourse and there is little disagreement that the United States needs to reduce its dependence on foreign oil and develop clean, dependable energy sources.

Regulators said they envisage new specific treatment for resecuritizations, and expect an interim treatment until banks are fully integrated to the new Basel accord.

Over the past few weeks, Brazil has experienced its own version of the flight-to-quality that's torn through the U.S. and Western European money markets. Small and medium banks are seeing depositors defect to larger competitors, while funding sources have evaporated.

The U.K. government's move to backstop bank debt liabilities is expected to have a positive spillover effect on ABS pricing.

In these challenging times for domestic securitization in both the U.S. and Canada, two recent developments will serve to ease the burden of cross-border ABS transactions. A number of these transactions have occurred and more are in the works.

Let us acknowledge the end of securitization as we have known it. As what began as a "subprime" problem metastasized into, first, a credit market collapse and, ultimately, a worldwide economic crisis, those of us who lived and worked and profited from securitization should do some deep soul-searching. What we now see, with the benefit of hindsight, is not just a series of bad judgments and unintended consequences but instead a wholesale systemic failure of gargantuan proportions. The original securitization paradigm became so corrupted over time by those participating in the MBS/CDO sector that it is pointless to debate whether good technology got into the wrong hands or the technology was itself flawed. It is impossible to distinguish "the dancer from the dance," and the market is, without mercy, sweeping both away.

For collateral managers who focus on CDOs, the most recent stream of troubling news in the financial sector has further shaken up an industry already reeling from more than a year's worth of nega-

The third quarter of 2008 brought a dramatic reorganization of the global banking system and a virtual shutdown in the credit markets. Financial guarantors, which have been battling downgrades for months now, have seen new structured finance opportunities seize up.

Fannie Mae announced two weeks ago that it would cancel the planned increase in its adverse market delivery fee. The hike would have taken effect Nov. 1.

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

More bad news for the MBS sector came in this week, according to a recent report from RBS Greenwich Capital, which showed that housing starts plummeted in September by over 6%, the lowest level since 1991.

The Mortgage Bankers Association (MBA) has hired Len Wolfson to be director of legislative Affairs.

Fitch Ratings announced that it has started a review of its counterparty criteria for global structured finance transactions.

The Bank of New York Mellon (TBNY) has been selected by the U.S. Department of the Treasury to help implement the government's Troubled Asset Relief Program under the Emergency Economic Stabilization Act.

The Treasury Department Tuesday morning said it would use $250 billion of taxpayer money earmarked for the new Troubled Asset Relief Program to invest in dozens of the nation's depositories, including some of the largest: Bank of America (which now owns Countrywide Home Loans), Citigroup, JPMorgan Chase, Merrill Lynch, and Wells Fargo.

Moody's Investors Service withdrew the 'Ca' issuer rating for The Education Resources Institute (TERI).

Fitch Ratings said today that U.K. nonconforming RMBS face increasing downside as a result of the current declining performance trends and downward pressure on house prices.

Eclectica Asset Management appointed Joe Rouncefield and Camilla Panton to its sales and marketing team.

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