RMBS

  • 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

  • Recourse rankings implemented

    Moody's reports that the European housing market remains full recourse in nature in that, following default and foreclosure, borrowers are still liable for any remaining shortfall after the property sale. That said, considerable variation exists within different European jurisdictions in terms of the use of bankruptcy procedures and the efficiency and timing of the foreclosure process.

    To reflect these differences, .......

    News Round-up 4 December 2013

  • Distressed exchange for ESAIL juniors

    Fitch has downgraded the single-C rated B1c, C1c and D1c classes of Eurosail-UK 2007-5NP to D, following the restructuring of the transaction (SCI passim). In addition, it has placed the double-C rated A1a and A1c classes on rating watch positive (RWP).

    The RMBS received US$35.1m on 21 November through an auction of its remaining claims against the Lehman Brothers bankruptcy .......

    News Round-up 3 December 2013

  • Stable outlook for APAC ratings, performance

    Fitch expects both the ratings and asset sector performance of Asia-Pacific (APAC) structured finance (SF) transactions to remain stable over the course of next year. Most public long-term ratings on APAC SF transactions are anticipated to remain at their current level throughout 2014. Of the 10 non-stable outlooks in place at end-3Q13, six were on positive outlook and four were .......

    News Round-up 3 December 2013

  • Subprime starts RMBS reawakening

    Secondary market activity was sluggish across the board to start the week as traders returned to their desks. US non-agency RMBS was one of the more active markets, with around US$225m in BWIC volume and a range of names captured by SCI's PriceABS data.

    Subprime and option ARM paper dominated supply yesterday, with Countrywide bonds accounting for a .......

    Market Reports 3 December 2013

  • Dutch IO exposure to decline

    The exposure of the Dutch RMBS market to full interest-only (IO) loans is moderate, Moody's says. Moreover, the agency expects the percentage of full interest-only loans in the Dutch RMBS market to decline, with amortising loans becoming the market standard.

    Moody's notes that the limited vulnerability of the Dutch RMBS market to full IO loans stems from the small contribution .......

    News Round-up 2 December 2013

  • New home for Euro ABS trader

    Daniel Turner has joined Ellington Management Group as md in London. He takes responsibility for European ABS.

    Turner was previously a partner at Chenavari Investment Managers, where he focused on European ABS and RMBS. He has also worked at European Credit Management, ING and Capital Economics.

    .......

    Job Swaps 28 November 2013

  • Spanish severities highest in tourist belt

    Moody's loss severity calculations on repossessed Spanish properties show highest loss severities on the Mediterranean coast, Andalucia and the Canary Islands - albeit within its assumptions for defaulted loans. While this is not expected to lead to any rating actions on Spanish RMBS, high loss severities on repossessed mortgaged properties are credit negative, the agency notes.

    Moody's compared the prices .......

    News Round-up 28 November 2013

  • Driving disintermediation

    Credit availability facing further headwinds?

    Global regulatory initiatives are fostering bank disintermediation in the securitisation market. But creeping oversight of the shadow banking system could also further reduce the availability of credit.

    The recession has played out unequally, according to Tamara Box, head of structured finance at Reed Smith. "If a borrower is in prime territory, they're fine; otherwise, they're not. Current monetary and economic .......

    News Analysis 28 November 2013

  • QM standards to limit mortgage credit

    The new ability-to-repay (ATR) rule and qualified mortgage standards under the US Truth in Lending Act could mean that tight access to mortgage credit will continue, according to S&P. Beginning with loan applications accepted on 10 January 2014, the rule will require loan originators to make a reasonable, good faith determination of a borrower's ability to repay a loan. It .......

    News Round-up 27 November 2013

  • Loan mod growth to continue

    S&P has analysed which forms of mortgage loan modification have the best success rate when it comes to minimising borrower defaults. Rate reductions appear to be the most common form of modification, but principal reductions offer the most benefit to borrowers looking to avoid default.

    Both modifications pose different levels of risk to RMBS cashflows, however. "Just as no two .......

    News Round-up 27 November 2013

  • Liquidation timelines lengthening

    Morningstar Credit Ratings forecasts that, given current market dynamics, it will take 49 months to clear US RMBS distressed inventories. This forecast is five months higher than the agency's 2Q13 forecast and has increased by eleven months from its forecast one year ago.

    The overall distressed inventory has decreased by 20% from one year ago, while the number of liquidations .......

    News Round-up 27 November 2013

  • ESAIL 2007-5 restructuring implemented

    Eurosail-UK 2007-5NP bondholders yesterday duly passed the extraordinary resolutions relating to the proposed restructuring of the £662m RMBS and the issuer is set to implement the first stage of the process (SCI 6 November). The transaction is the second UK Lehman RMBS deal to be restructured to resolve 'broken swap' issues, but the first to have required bondholder meetings to .......

    News Round-up 27 November 2013

  • SCI conference line-up unveiled

    Final panellist line-ups have been announced for SCI's 7th Annual Seminar, which is taking place on 4 December in London. The event is being held at Reed Smith's offices at Broadgate Tower, 20 Primrose Street, EC2A 2RS.

    This conference will focus on the 'new normal' appearing in the structured credit markets as banks continue to dispose of risky assets and .......

    News Round-up 27 November 2013

  • FONE positive for TFOVIS RMBS

    The Mexican Lower House of Congress recently approved the governing laws for the just-created Contribution Fund for Educational Payroll and Operating Expenses (FONE). Anticipated to take effect in 2015, the reform would make the Mexican government directly responsible for the payrolls of 70%-75% of all teachers in public schools, thereby removing the responsibility from the states.

    Moody's notes in its .......

    News Round-up 26 November 2013

  • GSE progress report released

    The FHFA has issued a progress report on the initiatives outlined in the 'Strategic Plan for the Enterprise Conservatorships' and the '2013 Conservatorship Scorecard'. In particular, it says that important progress has been achieved towards the establishment of a new secondary mortgage market infrastructure and the contracting of Fannie Mae and Freddie Mac's dominant presence in the marketplace.

    Among the .......

    News Round-up 26 November 2013

  • LMI sensitivity examined

    The sensitivity of Australian triple-A rated prime RMBS to lenders' mortgage insurance (LMI) providers has continued to decrease, S&P reports. The agency adds that subordinated RMBS credit quality remains highly dependent on the credit quality of LMI providers and the continuation of their strong claims pay-out ratios.

    Without giving credit to LMI, about 82% of triple-A rated prime RMBS are .......

    News Round-up 26 November 2013

  • Bank settlement exposure analysed

    Bank of America, Citi, Goldman Sachs, JPMorgan, Morgan Stanley and Wells Fargo together have paid or set aside more than US$45bn for mortgage representation and warranty issues and have incurred roughly US$50bn in combined legal expenses since 2009, according to S&P figures. This is in addition to another roughly US$30bn of expenses and mortgage payment relief to consumers to settle .......

    News Round-up 26 November 2013

  • MSR transfers changing servicing landscape

    Large portfolios of non-agency RMBS mortgage servicing rights (MSRs) continued to move from banks to non-bank servicers in 3Q13. Fitch expects additional large MSR transfers to occur by year-end as the banks continue to offload defaulted/high-risk loans.

    These transfers have contributed to many changes in the servicing landscape as non-bank servicers now have higher subprime delinquency rates and use principal .......

    News Round-up 26 November 2013

  • TPO performance improving

    Recent residential mortgages initiated by third-party brokers and correspondent lenders have been performing nearly as well as the retail loans that the ultimate originators source directly from the borrower, Moody's reports. Pre-financial crisis third-party originated loans (TPOs) defaulted far more frequently than retail loans.

    Moody's notes that the narrower gap in recent loan performance is due to tighter lending and .......

    News Round-up 25 November 2013

  • Former credit chief sentenced for MBS fraud

    Credit Suisse's former global head of structured credit, Kareem Serageldin, has been sentenced to 30 months in prison for his part in hiding more than US$100m in losses in an MBS trading book at the bank (SCI 20 February 2008). The bonds included subprime RMBS and CMBS.

    Serageldin's manipulation of bond prices contributed to Credit Suisse taking a US$2.65bn write-down .......

    Job Swaps 25 November 2013
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