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Inside MBS & ABS

April 18, 2008

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Regulator Acknowledges Fannie and Freddie Don’t Have To Take Massive Writedowns on Non-Agency MBS

Fannie Mae and Freddie Mac are sitting on nearly $20 billion of potential writedowns on their mortgage-securities holdings that would severely undermine their already delicate financial condition, but federal regulators say the government-sponsored... Read More

GSE MBS Holdings Declined Slightly In 2007 as Purchase Volume Slowed

2007 was a huge year for MBS production at Fannie Mae and Freddie Mac, setting the stage for what looks like an even bigger 2008, but neither government-sponsored enterprise was especially aggressive in buying new mortgage securities for their... [Includes two charts] Read More

FDIC Approves Interim Policy Designed to Spur Development of U.S. Covered Bond Market

Federal regulators this week approved an interim policy that could help banks and thrifts explore covered bond issuance as an alternative to traditional mortgage securitization. Although covered bonds backed by mortgage loans are a well-developed market... Read More

Conforming Jumbo Programs Seen as Best Option for MBS Investors to Unload Credit Risk on FHA and GSEs

The “conforming jumbo” programs recently implemented by the FHA, Fannie Mae and Freddie Mac offer MBS investors a way to minimize losses as home prices decline. But the programs are barely getting off the ground and their future beyond the end of 2008 is up... Read More

Legislative Remedies for Mortgage Problems May Cause More Harm Than Good, Wall Street Warns

Democrats in Congress appear intent on pushing an ambitious slate of new legislation to fix what’s wrong in the mortgage and MBS market, but Wall Street says many of the proposals won’t work or will make problems worse. Lawmakers in both the House and Senate convened... Read More

Investor Cooperation Necessary for Proposed FHA Bailout Plans to Work; Adverse Selection a Concern

Despite opposition from the Bush administration, Democrats in Congress appear intent on passing legislation to leverage the FHA to help borrowers with underwater mortgages – but any such program may ultimately depend on the willingness of investors to go... Read More

Fannie and Freddie Face Unknown Territory When it Comes to Their Liquidity Role, S&P Says

Fannie Mae and Freddie Mac are facing increasing demand for liquidity in a historically weak market at a time when their own bottom lines are under intense pressure, moving them into uncharted waters, according to a new report this week from Standard & Poor’s... Read More

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