RMBS

  • Top trades touted

    Morgan Stanley suggests in its global securitised products outlook for 2014 that the market is on the verge of a major transition from being liquidity-driven to being growth-dependent. While the returns are more modest in this scenario than they have been in the past, strategists at the bank believe that alpha opportunities within the sector remain more significant, scalable and .......

    News 11 December 2013

  • Newark eyes eminent domain

    Newark City Council has formally voted to start legal research towards using eminent domain to seize underwater mortgages. Newark accounts for 268 first lien loans in RMBS trusts that are underwater but current, according to Barclays Capital figures.

    The UPB of these loans is US$80m and they are expected to take a US$24m loss if they are written down to .......

    News Round-up 10 December 2013

  • Forward-settling MBS supported

    Northern Trust has enhanced its collateral management system to include forward-settling MBS in response to new margin recommendations. Offered as a component of the firm's investment operations outsourcing for asset managers, the service supports two-way variation margin recommended as of 31 December by the Treasury Market Practices Group (TMPG).

    The forward-settling nature of most agency MBS transactions exposes trading parties .......

    News Round-up 10 December 2013

  • Servicing deficiencies remain

    The latest report from Joseph Smith, a court-appointed monitor of the US$25bn national mortgage settlement, indicates that certain deficiencies remain outstanding in meeting the settlement terms in servicing delinquent mortgage loans. Yet the report also notes that progress is being made to address the issues.

    The monitor used 26 metrics and 304 distinct standards to establish compliance. However, broader servicing .......

    News Round-up 10 December 2013

  • Strong results seen for MBS funds

    Hedge fund returns rose by an average of 1.1% in November, boosting average year-to-date returns to 8.2%, according to the latest eVestment figures. On an annualised basis the industry is on pace to return 9% for the year, nearly 150bp ahead of 2012's 7.5% increase.

    With a 0.35% return, credit strategies lagged the industry's average returns in November, weighed down .......

    News Round-up 10 December 2013

  • ResCap objections resolved

    Residential Capital expects to exit bankruptcy by 24 December, having resolved bondholder objections to its reorganisation plan. RMBS holders will be paid US$672.3m in rep and warranty recoveries as part of the plan. The RMBS trustees need to appoint a financial adviser to allocate this money among the RFC and GMAC trusts, with the recoveries likely to flow to bondholders .......

    Job Swaps 10 December 2013

  • Record RMBS settlement agreed

    Countrywide Financial Corporation has agreed to pay US$500m to investors who allege that they were misled by the company's sale of RMBS from 2005 to 2007. It is the largest RMBS class action settlement in history.

    Robbins Geller Rudman & Dowd represented plaintiffs in the record-breaking case. The class action was launched two years ago (SCI 26 September 2011).

    .......

    Job Swaps 10 December 2013

  • Supply up ahead of IABF sale

    Sales from the ING Illiquid Assets Back-up Facility are set to begin with a US$5.1bn list scheduled to trade tomorrow (11 December). The list consists of 316 RMBS bonds that are predominantly backed by 2006 and 2007 option ARM collateral.

    The assets could trade either on a CUSIP level or as an AON, which may allow for broader client participation. .......

    News Round-up 10 December 2013

  • RMBS call dates extended

    The Langton Securities series 2010-1, 2010-2 and 2011-2 RMBS have been restructured. The restructuring involved extending the call dates and margin step-up dates on six rated notes (2010-1 A5 and A9, 2010-2 A3, and 2011-1 A1, A2 and A7) and two unrated notes (2010-1 Z1 and Z2). The margins paid on the cross-currency swaps for the two euro-denominated notes - .......

    News Round-up 9 December 2013

  • Tunisian RMBS downgraded

    Moody's has downgraded the global scale ratings of the senior FCC BIAT-CREDIMMO 1 and FCC BIAT-CREDIMMO 2 notes, as well as the global and national scale ratings of the junior FCC BIAT-CREDIMMO 2 notes. The agency has also affirmed the national scale ratings of the senior notes in both transactions and the global and national scale ratings of the junior .......

    News Round-up 6 December 2013

  • Minimal Euro default rate underlined

    Only 1.5% by original issuance volume of European structured finance notes outstanding in mid-2007 had defaulted by end-3Q13, according to S&P's latest quarterly transition study. The quarterly transition study analyses cumulative rating transitions and defaults from the beginning of the financial downturn - which is assumed to be mid-2007 - until end 3Q13, aggregating by issuance volume.

    "The 12-month rolling .......

    News Round-up 6 December 2013

  • Euro ABS market still active

    The European ABS and RMBS secondary markets continue to witness strong BWIC supply. SCI's PriceABS data shows a number of covers from yesterday's session, while one trader reports that next week is also expected to be busy.

    "There have been a lot of bid-lists lately and those are mainly coming from hedge funds rather than legacy accounts. What .......

    Market Reports 6 December 2013

  • RFC issued on non-QM approach

    Kroll Bond Rating Agency is proposing to extend its existing methodologies for rating RMBS to address additional risks for pools backed by non-Qualified Mortgage loans. The agency has released for comment a methodology relating to non-QM loans that are prime credit quality mortgage loans.

    The key components of KBRA's non-QM rating methodology consist of: loan originator and servicer reviews; loan .......

    News Round-up 6 December 2013

  • RMBS credit quality to vary

    New issue private-label US RMBS credit quality implications will vary next year, according to Moody's. The agency expects new transactions in 2014 to be of lower credit quality because originators will likely have trouble maintaining volume in loan pools as refinancing activity decreases.

    This will lead originators to relax underwriting standards, resulting in further deterioration of the credit quality of .......

    News Round-up 6 December 2013

  • Greek country ceiling lifted

    Fitch and Moody's have implemented positive rating actions on a number of Greek securitisations. The move follows an uplift in the Greek country ceiling by both agencies.

    Moody's upgraded 16 notes and affirmed six notes in nine Greek transactions, after the agency raised its country ceiling on Greece to B3 from Caa2 and upgraded Greece's sovereign rating to Caa3 from .......

    News Round-up 5 December 2013

  • Steady RMBS performance predicted

    Fitch's 2014 outlook for US RMBS is stable, with home price growth and stable macro conditions expected to support steady performance across most vintages. Post-crisis transaction performance remains exceptionally strong with no downgrades to date and this trend is expected to continue into next year.

    Past rating actions, combined with improving credit trends and positive momentum in the housing market, .......

    News Round-up 5 December 2013

  • Higher loss severities for non-QM RMBS

    US RMBS backed by non-qualified mortgages will incur higher loss severities on defaulted loans than those backed by qualified mortgages. Non-QM loans will therefore increase risk in new RMBS.

    Moody's notes that the higher loss severities will be driven by the higher legal costs and penalties for non-QM securitisations, where a defaulted borrower can more easily sue a securitisation trust .......

    News Round-up 5 December 2013

  • Divergent Euro rating outlook

    Fitch's rating outlook for European structured finance (SF) transactions is geographically split. Almost 70% of ratings in the core European countries are predominantly stable, with the remainder related to transactions from the eurozone periphery, which are predominantly negative.

    The negative outlooks for the eurozone periphery reflect a combination of declining asset performance, uncertainty over timing and extent of recoveries, policy .......

    News Round-up 5 December 2013

  • Euro credit quality to remain stable

    The credit quality of European ABS and RMBS transactions will remain stable overall in 2014, says Moody's in its outlook report for the sector. Against the backdrop of stabilising macroeconomic drivers for most countries, affordability across Europe will be sustained by the low interest rate environment, prudent underwriting criteria and regulatory initiatives to boost credit supply.

    While considerable risks remain, .......

    News Round-up 5 December 2013

  • IABF unwind to begin

    The Dutch government intends to start a competitive auction process to sell the non-agency RMBS underlying the ING Illiquid Assets Back-up Facility (IABF). BlackRock Securities will be responsible for the execution of the sale of the securities on behalf of the Dutch State Treasury Agency (DSTA).

    The IABF was created almost five years ago (SCI 28 January 2009) as one .......

    News Round-up 5 December 2013

  • Freddie settles BAML claim

    Freddie Mac has entered into a settlement agreement with Bank of America concerning the GSE's claims related to representations and warranties on single-family loans it was sold. Under the terms of the agreement, Bank of America agreed to pay Freddie Mac a total of US$404m, less credits of US$13m for repurchases already made and for reconciling adjustments.

    Freddie Mac, subject .......

    Job Swaps 4 December 2013
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