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Inside MBS & ABS

January 9, 2009

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MBS and ABS Issuance Hit New Lows in Crumbling Fourth Quarter Despite Some Firming in December

The business of securitizing home mortgages and other financial assets continued to deteriorate in the final throes of 2008, a watershed year that saw the industry turn almost exclusively to government-backed programs. New MBS and ABS issuance in 2008 totaled just $1.430 trillion, down 33 percent from the previous year. Although that was the lowest... [Includes two charts] Read More

Suspension of Fair Value Standards will Result in Conflicts, Investor Uncertainty, SEC Report Warns

A Securities and Exchange Commission report mandated by Congress urged lawmakers not to suspend existing fair-value and mark-to-market accounting standards, suggesting instead improvements in their applications. The SEC said that suspending Statement of Financial Accounting Standard 157, which establishes the rules for fair-value measurements, would only result in... Read More

Fed Launches Agency MBS Purchase Program In Market Suddenly Awash in Liquidity

The Federal Reserve Bank of New York this week dove headlong into the MBS market, buying $9.76 billion of agency MBS in a market that suddenly appears to have more than enough buying appetite for the relatively feeble supply of new product. As a group, Fannie Mae, Freddie Mac and Ginnie Mae issued $73.71 billion of MBS during December, as consumer... [Includes one chart] Read More

Federal Reserve Details of ABS Purchase Facility, Lending to Begin in February

The Federal Reserve Board is gearing up to start using its new Term Asset-Backed Securities Loan Facility next month as it attempts to lubricate the dried-up ABS market. Under TALF, the Federal Reserve Bank of New York will provide $200 billion in loans in maturities from one to three years. The loans will be fully secured by investment-grade securities backed by auto... Read More

Structured Mortgage Securities Issuance Drops Sharply in Late 2008; Fannie Ends on Top

New production of real estate mortgage investment conduits backed by agency MBS fell dramatically as the financial markets came unglued during the last four months of 2008. A total of just $8.34 billion of agency REMICs were issued during the fourth quarter, down 75 percent from the previous... [Includes one chart] Read More

Industry Sources See More Potential in TARP Asset Guarantee Program Than Treasury

The Treasury Department last week outlined how it might use the authority provided by Congress to create a new asset guarantee program, but the agency was significantly less enthusiastic about the possibilities than were many industry experts who offered their advice. It’s not at all clear if Treasury will guarantee any assets during the remaining weeks of the Bush administration... Read More

Change of Administrations Prompts Fresh Calls For Overhauling Fannie Mae, Freddie Mac

The changing of the political guard in the nation’s capital is providing another opportunity for policymakers to ponder the future of Fannie Mae and Freddie Mac and the forms the government-sponsored enterprises should take once they emerge from conservatorship. But before that decision is made, agreement needs to be reached on just how involved the federal government... Read More

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