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Inside MBS & ABS

July 3, 2008

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Regulators to Propose Standardized Rules to Align Regulatory Capital with Actual Risk Exposures

Federal thrift and banking regulators will be seeking comment on a proposed rule that would provide an optional capital framework for calculating risk-based capital requirements for banks not subject to the so-called advanced approaches rule of Basle II. The proposed rule, referred to as the standardized approach, is designed to more closely align regulatory capital requirements with... Read More

Subscription-Based Model for Credit Rating Hopes to Be the Answer to Industry Problems

A newcomer to the structured finance rating business will try to make its mark against four bigger competitors by selling its ratings to investors, rather than being paid by issuers. Realpoint LLC this week became the 10th bond-rating firm to be granted Nationally Recognized Statistical Rating Organization status by the Securities and Exchange Commission. The Horsham, PA-based... Read More

Agency REMIC Production Gains Momentum But Still Lags 2007 Pace

Fannie Mae, Freddie Mac and Ginnie Mae stepped up their production of structured mortgage securities during the second quarter, issuing $52.18 billion of new real estate mortgage investment conduits, according to the Inside Mortgage Finance MBS Database. That was up 7.0 percent from the first three months of 2008, but it still left... [Includes two charts] Read More

Fitch Considering Disclosure of the Holder of MBS Equity Pieces to Boost Transparency for Investors

Fitch Ratings last week unveiled a proposal to have key transaction parties disclose whether they retain the economic risk of the equity or first loss piece on Fitch-rated MBS. The rating service said the disclosure could be disruptive for some secondary market participants, but would fulfill regulators’ calls for increased transparency. Before the non-agency MBS market collapsed, investor... Read More

Investors Have the Capital to Buy Distressed Assets but Servicing Activity Is a Concern

Investors will have a hard time making a quick buck on distressed mortgages, though long-term investing opportunities exist. At the Securities Industry and Financial Markets Association’s MBS due diligence conference last week in New York, Robert Kapito, president of BlackRock, said plenty of mortgage-related options await investors. “This is the best time we’ve ever been in to add value... Read More

SEC to Senators: Potential Information Sharing with The Fed Would Not Create New Legal Authorities

A proposed information sharing agreement between the Federal Reserve and the Securities and Exchange Commission should not cause Congress concern, according to the SEC. The Fed was reportedly close to expanding its regulation to include investment banks under a proposed Memorandum of Understanding, but key members of the Senate implored the regulators to put the agreement on hold until... Read More

MBS Issuance Turns a Corner in Second Quarter, But Rebound May Be Short-Lived

ew production of mortgage-backed securities increased by a healthy 13.9 percent during the second quarter of 2008, marking the first time new production has posted a quarterly gain since the non-agency MBS market unraveled last year. According to a new analysis by Inside MBS & ABS, a total of $393.25 billion of MBS were issued during the second quarter. But the high mark... [Includes two charts] Read More

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