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Inside MBS & ABS

July 1, 2011

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BofA Settlement Provides Modest Boost for Non-Agency MBS, But Still Hurdles to Clear

Bank of America’s hefty $8.5 billion offer to settle representations and warranties claims on Countrywide non-agency MBS will help the bank move past a big chunk of its mortgage woes while giving investors in the worst-performing deals a positive jolt. BofA announced separate agreements with Bank of New York Mellon, the trustee for some 530 non-agency MBS issued...[Includes one data chart] Read More

Gloom Over Non-Agency MBS Persists in 2011; Agency Demand Expected to Exceed Supply

There have been only a few non-agency MBS securitizations in 2011, and the remainder of the year is not expected to be any more fruitful, according to panelists at the American Securitization Forum annual conference held last week in Washington, DC. Fitch Ratings has rated only one RMBS transaction, said Douglas Murray, group managing director at Fitch Ratings, but there have been... Read More

Risk-Retention Rule Does Not Make Securitization A Less Appealing Option, NY Fed Official Says

An official from the Federal Reserve Bank of New York defended the joint agency proposed rule on risk retention, claiming that it doesn’t do anything to block incentives to securitize. The proposed rule has been widely criticized by Wall Street and other financial institutions, which have urged the agencies to start over again with a new proposal. “I don’t understand how you would get... Read More

Ginnie Mae Announces Technical Changes to Rules on Collecting, Reporting Pool, Loan Data

Ginnie Mae has made some changes regarding the collection and reporting of data on the underlying collateral that backs outstanding Ginnie Mae MBS. The goal is to expand the type of data collected at pool issuance to provide greater transparency and more relevant information to investors. The technical changes were laid out this week for Ginnie Mae program participants during a webinar hosted by the agency. Some of the changes relate... Read More

Vendor Says Small Technical Adjustment Helps To Curb Fails in To Be Announced MBS Market

Tradeweb claims its Round Robin functionality has curbed trade failures in the to be announced mortgage market to the tune of $166 billion since it was introduced in November. First, the service has reduced the “round robin” risk; that is, the risk associated with a chain of matched fails that frequently becomes a closed loop. The new technology enables institutional clients to pair-off TBA mortgage pool transactions with dealers, which reduces... Read More

Foreign Investors Were Net Sellers Of U.S. Agency Debt in Early 2011

Overseas investors were net sellers of U.S. agency notes and bonds – including agency MBS – during the first quarter of 2011, according to an analysis of market data by the Securities Industry and Financial Markets Associations. Foreign investors bought some $5.46 billion of agency paper during the first quarter of this year, but that wasn’t...[Includes one data chart] Read More

Group Lowers Fails Charge

The Treasury Market Practices Group this week proposed a revised recommendation for a charge on MBS deals that fail. Under the new policy, the fails charge of agency MBS would be the greater of 0 percent or 2.0 percent minus the federal funds target rate. The charge would accrue... Read More

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