Securitization

Weakening fortunes in the auto industry from the COVID-19 pandemic is prompting elevated loss expectations for a new-issue portfolio of prime automobile loans originated and serviced by Hyundai Capital America.

GM Financial's next auto-loan securitization is expected to have more front-loaded losses due to pandemic-related stresses

Bank research reports note the loans will only apply to purchases of CLO notes backed by newly issued leveraged loans. Most recently launched deals involve warehoused or distressed secondary-market loans ineligible for TALF.

The two companies are placing two deep-subprime securitizations of consumer loan and lease contracts issued prior to the coronavirus impact on originations.

The Federal Reserve's $2.3 trillion loan stimulus includes plans for outstanding commercial mortgage-backed securities and newly issued collateralized loan obligations.

Fitch assumes a significant spike in defaults over the next few months, as well as declining new issuance volume during the second and third quarters of 2020, fewer maturing loans and fewer resolutions by special servicers.

Michael Burry, the doctor-turned-investor who famously bet against mortgage securities before the 2008 financial crisis, has taken to Twitter with a controversial message: lockdowns intended to contain the coronavirus pandemic are worse than the disease itself.

Fitch expects a majority of European CLO junior notes to be placed on a potential downgrade watch due to enhanced evaluation for coronavirus-related stresses.

Ginnie Mae and the FHA provided temporary liquidity relief for mortgage servicers bracing for higher delinquencies, but the industry continues to pressure Treasury and the Fed to provide more comprehensive support.

ABS participants saw markets freeze and were bracing for worse when federal aid provide a short-term respite. The question now: How much trust can anyone put in the medium-term and beyond?

Mortgage servicers need direction from federal agencies on how to implement the forbearance plans called for in the CARES Act, according to the Community Home Lenders Association.

Hedge funds are making headlines daily with plans to capitalize on this rapid shift in the outlook, contending the market presents a once-in-a-lifetime opportunity

Mortgage bankers are sounding alarms that the Federal Reserve's emergency purchases of bonds tied to home loans are unintentionally putting their industry at risk by triggering a flood of margin calls on hedges lenders have entered into to protect themselves from losses.

Tom Barrack, who a week ago warned that commercial real estate financing was on the brink of collapse because of the coronavirus pandemic, is now calling for a moratorium on margin calls and intervention by the Federal Reserve to keep values of mortgage debt from plummeting further.

Two Harbors, a real estate investment trust, sold the bulk of its nonagency mortgage-backed securities portfolio to head off margin calls and refocus on its more favorable agency-MBS investments.

Dramatic Fed intervention may steady some markets, but unless something changes — and, judging by the last two weeks, it very well could — the central bank won’t be there to save fallen angels. Which brave investors will step up?

FirstKey's securitization of well-seasoned, reperforming loans is the second such transaction in a week — amid an otherwise barren securitization market ground to a halt from the coronavirus crisis.

Real estate investor Tom Barrack said predicted a “domino effect” of catastrophic economic consequences if banks and government don’t take prompt action to keep commercial mortgage borrowers from defaulting.

The Federal Housing Finance Agency authorized the government-sponsored enterprises to lend additional support to the mortgage-backed securities market and temporarily allow some flexibility in lending requirements to address coronavirus-related concerns.

The Federal Reserve committed Monday to conducting more asset purchases of Treasury securities and mortgage-backed securities and announced $300 billion in new financing for credit facilities.