Commercial banks increased their holdings of mortgage securities in late 2009, although it remains to be seen how big a force the industry will be in absorbing new MBS issuance as the Federal Reserve winds down its operations. Commercial banks held a record $1.162 trillion of residential MBS at the end of last year, a healthy 3.9 percent increase... [Includes three charts]
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Industry groups representing the MBS and ABS markets and mortgage lenders offered stiff criticism of the Federal Deposit Insurance Corp.’s controversial proposal to create a much narrower and more prescriptive safe harbor for securitizations issued by insured banks.The American Securitization Forum said the FDIC proposal would create substantial uncertainty for investors...
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The Obama administration has deferred until next year the release of specific proposals for reforming Fannie Mae, Freddie Mac and the mortgage finance business in general, although officials plan to begin researching possible strategies sometime sooner. During a hearing in the House Budget Committee this week, Treasury Secretary Timothy Geithner made the unexpected...
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The Securities and Exchange Commission this week approved a revised proposal from the Financial Industry Regulatory Authority to require bond traders to report MBS and ABS transaction information to FINRA’s electronic tracking system. The Trade Reporting and Compliance Engine, TRACE, was developed by FINRA in 2002 to help the agency improve its oversight of the corporate...
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Freddie Mac took another pounding in the fourth quarter, but it would have been a lot worse had it not been for favorable market value improvements for some of the company’s retained assets. Freddie reported a $2.7 billion decline in unrealized losses as a result of improved values for assets in the firm’s available-for-sale securities portfolio during the fourth quarter. That reversed a lot...
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MBS and ABS investors have long depended on credit rating agencies to help evaluate investment opportunities, but the influence of the services may be waning, according to a new report by Aite Group, a business and advisory firm. “While [nationally recognized statistical rating organization] ratings will remain a part of the global debt markets, NRSRO hegemony may wane...
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