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Inside MBS & ABS

June 18, 2010

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Reg Reform Conferees Favor Credit Rating Agencies By Striking Franken Amendment from Legislation

The credit rating agencies won a major victory this week after House and Senate conferees voted to require a federal study of conflicts of interest in the ratings business in lieu of a tough provision that would end the issuer-pays model for rating agencies. The compromise adopted by the committee would require the Securities and Exchange Commission to... Read More

Mortgage Securities Market Declines Again in 2010 As Issuance Slows, GSEs Buy Out Troubled Loans

The slowdown in new production of agency MBS and ongoing leakage from distressed mortgages led to another decline in the supply of mortgage-backed securities during early 2010. A total of $6.851 trillion of single-family MBS were outstanding as of the end of March, according to a new analysis by Inside MBS & ABS. That was down 1.7 percent from the... [Includes one chart] Read More

Loan Mods Improving Subprime Delinquencies More Than Prime, But Re-Default Risk Remains High

Loan modification efforts and other factors are improving the delinquency landscape, especially for subprime mortgages more than for prime, but analysts caution that re-default risk remains high across the credit spectrum. “Subprime mortgage loan performance appears to have turned a corner over the past several months,” said Peter McNally vice president and senior analyst at... Read More

FDIC Safe Harbor Rule May Impact Securitization Ratings, S&P Says

Although officials at the Federal Deposit Insurance Corp. say the agency’s proposed securitization rule is designed to boost investor confidence and restore the non-agency MBS and ABS markets, industry analysts question whether it will leave too much doubt in the market.The FDIC proposal, developed in response to new accounting rules on securitization, establishes... Read More

Ginnie Mae Launches New MBS Program For FHA Manufactured Housing Loans

Ginnie Mae announced last week that it has begun accepting applications for a manufactured housing MBS program for FHA Title 1 mortgages. Wall Street banks have been in discussions with companies that issued manufactured housing deals in the non-agency market, and Ginnie said the new program will help reopen the manufactured housing secondary market... Read More

Legislative Risk May be Biggest Driver of Private Credit Student Loan Performance

The performance of private credit student loan ABS, improving of late, has nonetheless been limited by the weak labor market, stagnant wages and high consumer debt burdens, according to a new analysis by Barclays Capital. However, the biggest threat to the performance and recovery of the sector going forward may be legislation on Capitol Hill. “There is a marked pro-consumer tilt in Washington these... Read More

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