Securitization

Mortgage rates jumped in response to the recent sharp sell-off resulting from perceived lower odds of further quantitative easing based on improving economic news.Freddie Mac reported 30-year fixed mortgage rates averaged 4.08%, a 16 basis points increase from last week. This is the highest level since late October. In addition, with an average 0.08-point, the no-point rate is near 4.30% and places 3.5% and some 4.0% coupons out of the refinancing window.

The National Credit Union Administration (NCUA) said it will receive roughly $5.25 million from HSBC for settling claims against the banking giant related to MBS it sold to five now defunct corporate credit unions.It is the third out-of-court settlement reached by NCUA over the corporate failures, following November deals with Deutsche Bank for $145 million and with Citigroup for $20.5 million.

Standard & Poor's said yesterday it is maintaining its CreditWatch with negative implications on Residential Capital's (ResCap) 'CC' ratings. The rating action was made last Nov. 10.

The Federal Housing Administration (FHA) has revamped a little used program for refinancing underwater conventional loans, and extended its "short refinance" program until the end of 2014.

In a report released today, Deutsche Bank Securities analysts examined the impact of Eastman Kodak Co.’s (Kodak) bankruptcy on the Hollywood and Highland loan in WFRBS 2011-C2.

Amherst Securities Group (ASG) analysts, in a report released today, said that servicers are charging considerably higher rates to borrowers on Home Affordable Refinance Program (HARP) loans.

A federal judge declined yesterday to dismiss charges that Barclays Capital packed a CDO it sold to Eastern Financial Florida Credit Union with junk, hastening the demise of the one-time $2.4 billion credit union, the biggest natural person credit union failure ever.

An Apollo Global Management managed European fund will acquire €650 million ($860 million) of Irish consumer credit card receivables from Bank of America.

The American Securitization Forum (ASF) today submitted a letter urging regulators to delay the Volcker Rule's implementation.

Mortgage application activity declined 7.4% in the week ending March 16 as mortgage rates rose in response to the Federal Open Market Committee's more upbeat assessment of the economy. This muddies the odds that further quantitative easing will be required.

Moody’s Investors Service is proposing changes to ratings and rating methodologies for public finance bonds secured by mortgages guaranteed or insured by third parties such as states, the federal government, or government sponsored entities.

Credit card ABS performance stayed strong in Wells Fargo Securities' credit card indices for March's distribution period, according to a report released this afternoon.

The increase in U.K. covered bonds shows a return of investor demand driven by an appetite for non-Euro denominated bonds, Bank of America Merrill Lynch analysts said.

Delton de Armas, previously CFO of Taylor, Bean & Whitaker (TBW), pleaded guilty today to making false statements and conspiring to commit bank and wire fraud.

Wells Fargo is already contacting borrowers who might be eligible for a principal reduction as required under the $25 billion robo-signing settlement with state and federal law enforcement agencies.

The consumer default rate on first mortgages declined by six basis points in February from January and by 43 basis points when compared with February 2011, the S&P/Experian Consumer Credit Default Indices showed.

The Federal Housing Finance Agency (FHFA) had sharp words early this week for state and local governments that have passed laws meant to help homeowners facing risk of foreclosure.

Yesterday the Education Finance Council (EFC), which represents U.S. nonprofit and state agency student finance organizations, opposed the Fairness for Struggling Students Act of 2011.

There is a significant disconnect in the Jumbo mortgage between the primary market and the secondary market. Since the 2008 financial crisis the once-thriving and vibrant non-agency, Jumbo MBS market has evaporated. Despite some attempts to resuscitate the Jumbo secondary market the gulf between investor needs and what consumers want remains large. Most of us are familiar with the expression “the elephant in the room.” Wikipedia defines this expression “as an English metaphorical idiom for an obvious truth that is being ignored or goes unaddressed.” Wikipedia goes on to say “the idiomatic expression also applies to an obvious problem or risk no one wants to discuss.” The application of this expression perfectly describes the dysfunctional gap between the terms investors want and what originators representing consumers need.

Mortgage bondholders are threatening legal action over the $25 billion national mortgage settlement, which will give the five largest servicers credits for principal writedowns that the bondholders may take.