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Inside MBS & ABS

August 21, 2009

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Successful TALF Program Won’t Come to Aid of Distressed MBS Market Due to Political Uncertainty

The Federal Reserve’s Term ABS Loan Facility has officially stopped flirting with the idea of supporting the troubled residential MBS sector. Though heralded as a great success by most secondary market participants, the TALF was weighed down by hesitation from the federal government and will leave the residential MBS market to fend for itself. The Obama administration... Read More

Securitization Rates Keep Climbing in First Half of 2009 As Non-Conforming Mortgage Sector Remains Dormant

The securitization process has taken a lot of criticism since the subprime implosion began two years ago, but it’s virtually the only thing keeping the U.S. mortgage market alive. A whopping 81.8 percent of new mortgages originated in the first half of 2009 were financed through securitization, according to a new Inside MBS & ABS analysis... [Includes one chart] Read More

Rapid Pace, Timing of FASB, IASB Accounting Projects Could Stifle Recovery of MBS Market

Certain accounting projects being undertaken by the Financial Accounting Standards Board and the International Accounting Standards Board could seriously hamper the recovery of the securitization market, given the rapid pace at which both bodies are working and the paths they are taking, warned the nation’s banking industry. In a recently issued white paper, the American... Read More

Fitch Toughens Seasoning Benefit of Its ResiLogic Model for Mortgages Originated After Mid-2005

The deteriorating performance of more recently originated mortgage loans has prompted Fitch Ratings to restrict the seasoning benefit given by its ResiLogic model for residential MBS, cutting off the frequency-of-foreclosure (FOF) benefit for loans made after June 2005. “The ResiLogic model previously reduced default expectations for mortgage loans that were more than 24 months... Read More

HAMP Second Lien, NPV Details Finalized; Moody’s Says Modification Goals on Track

The Obama administration this week continued to roll out more operational details about the Home Affordable Modification Program and, despite lingering concerns about its implementation, Moody’s Investors Service said the initiative could meet its goal of 500,000 mods by November. The administration’s latest data show that mortgage servicers had offered 400,000 HAMP... Read More

ASF Wants Expiring Web-Based Approach to Static Pool Presentation To Be Made Permanent or Extended

The American Securitization Forum has requested the Securities and Exchange Commission to make permanent a rule that allows static pool information to be provided on an Internet Web site for inclusion in the prospectus for asset- and mortgage-backed securities. In a letter to the Securities and Exchange Commission, the ASF noted that the alternative approach of posting static... Read More

Accounting Treatment Limits MBS OTTI Damage As FHLBanks See Net Jump in Second Quarter

By adopting revised accounting rules, the 12 Federal Home Loan Banks were able to avert taking a huge hit to earnings from deteriorating non-agency MBS while reporting a collective net income of $1.123 billion for the second quarter of 2009. That performance represented a 56.4 percent improvement from the $718 million gain recorded for the same period in the previous year, according to preliminary... Read More

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