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Inside MBS & ABS

September 26, 2008

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Congress Moves Toward Huge MBS Rescue Program; GSEs and Treasury Tapped to Provide More Support

Congress and the Bush administration were nearing agreement to authorize the Treasury Department to launch a new MBS purchase program as part of a broader effort to restore confidence and liquidity to the mortgage securities market. After days of pleading with skeptical lawmakers, proponents of the new Troubled Asset Recovery Program were hammering out a... Read More

GSEs Still Tops in Non-Agency MBS Holdings as of Midway Point in 2008

Freddie Mac and Fannie Mae remained the largest investors in non-agency MBS as of the end of June, making them major potential candidates for the Treasury Department’s proposed program to buy troubled mortgage-related assets. With no new issuance or purchases, both government-sponsored enterprises reported substantial declines in... [Includes one chart] Read More

Continuing Turmoil Breeds Movement To Suspend Fair Value Accounting

Momentum is building behind a push from industry experts and policymakers in the nation’s capital to suspend fair-value accounting principles, as the fragile financial and credit markets remain skittish and locked up in fear. The Financial Services Roundtable has been pushing the Securities and Exchange Commission to suspend such accounting treatment for all mortgage-related... Read More

Ginnie President Murin Says Agency’s Securities Are Key to Market Stability

Foreign investors have begun shifting their U.S. mortgage securities out of the Fannie/Freddie sector in favor of Ginnie Mae MBS, according to the agency’s top official. Joseph Murin, president of Ginnie Mae, reported that he found a sense of uncertainty about the future among attendees at a meeting last week with Asian investors, who account for about 34 percent of... Read More

Mortgage Securitization Rate Spiked Higher As Market Conditions Soured in 2nd Quarter

Ongoing deterioration in the housing market increasingly drove mortgage lenders to the safety of agency MBS programs during the second quarter of 2008, according to a new Inside MBS & ABS analysis of the market. Some 87.4 percent of residential mortgages originated in the second quarter were funneled into mortgage securities, virtually all of them agency... [Includes one chart] Read More

Covered Bonds: No Silver Bullet for Troubled U.S. MBS Market, But a Plausible Option

Covered bonds have never looked so good to the U.S. mortgage industry, now that the non-agency MBS market is in tatters and the long-term prospects for Fannie Mae and Freddie Mac are up for grabs.But despite a push from the federal government and encouraging words from Wall Street, experts aren’t yet willing to call covered bonds a sure bet. “This is a tough environment to launch a new... Read More

Moody’s Sees Negative Outlook for ABS And MBS, Updates Loss Expectations

Moody’s Investors Service laid out a grim forecast for the securities market last week, and on the same day updated loss expectations for subprime and jumbo MBS. “The negative outlooks reflect ongoing prospects of an economic slowdown as well as continued home price depreciation with rising delinquencies and foreclosures,” Moody’s said. “The impact of these negative... Read More

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