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Tag Archives: RMBS

Study: Less Than 3% of Mortgage Mods Involve Principal Reductions

The ratings agency DBRS made principal reductions the focus of a research note released Monday. The firm's analysts stressed that as a modification technique, debt forgiveness has long been regarded as controversial in the mortgage industry due to its moral hazard risk and the potential impact it could have on the performance of securitized mortgages. As such, it's been utilized on a very limited basis. Based on first-quarter data, DBRS found that principal reduction modifications accounted for 2.80 percent of the total mods performed.

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Justice Department Joins Investigation of S&P

Investigators are looking to determine whether Standard and Poor's (S&P) over-rated dozens of mortgage-backed securities prior to the financial crisis. The Securities and Exchange Commission has been investigating the matter for several months, and the Justice Department recently joined the investigation, according to media reports. The federal probe began before S&P downgraded the U.S. credit rating from triple-A status to double-A status. The SEC has reportedly also been investigating Moody's in regards to two mortgage-bond deals.

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CoreLogic Technology Forecasts Mortgage Performance

CoreLogic announced the availability of RiskModel Version 4.4 this week. The new technology offering is an analytics application that forecasts future mortgage prepayments, defaults, losses, and cash flows at both the loan and portfolio level. This latest version integrates the CoreLogic Home Price Index (HPI) with new transition and loss-given-default models for Alt-A first and second-lien mortgages, allowing more than 75 percent of the loans in the development dataset to be estimated at the ZIP code level.

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Delaware AG Opposes BofA Settlement

Delaware Attorney General Beau Biden has announced his opposition to the proposed $8.5 million Bank of America settlement. He sent a petition to the New York Supreme Court expressing his disapproval and requesting permission to intervene in the court's review of the settlement. ""I am intervening to enforce our laws and to protect Delaware investors who may have been harmed by these toxic securities,"" Biden said. ""Intervening in this settlement puts us in position to ensure that the banks are playing by the rules.""

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NCUA Faults Goldman Sachs with Credit Union Failures

The National Credit Union Administration (NCUA) is suing Goldman Sachs in hopes of recovering losses it incurred as the result of two failed credit unions - U.S. Central and Western Corporate federal credit unions. The complaint filed in a California district court alleges Goldman Sachs misrepresented the risks associated with residential mortgage-backed securities bought by the two credit unions, ultimately leading to their demise. It's the fourth securities-related suit NCUA has filed, and the agency says there's more to come.

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AIG Files Suit Against BofA While Opposition to Settlement Continues

American International Group Inc. (AIG) filed a lawsuit Monday against Bank of America claiming the bank's subsidiaries, Countrywide and Merrill Lynch, withheld information from its investors regarding loan quality. AIG hopes to secure more than $10 billion from BofA to recover losses resulting from the alleged non-disclosures. The insurance company accuses BofA of giving investors a false account of the performance of its residential mortgage-backed securities. BofA maintains that AIG is responsible for its own losses and rejects AIG's accusations of fraud.

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FHFA Sues UBS to Recover Fannie and Freddie Losses

The Federal Housing Finance Agency (FHFA) filed a lawsuit last week in a New York federal court against UBS Americas, Inc. for violations of federal securities laws related to UBS' sale of $4.5 billion in private-label residential mortgage-backed securities to Fannie Mae and Freddie Mac. The lawsuit alleges that UBS Americas made material misstatements and omissions about the mortgage loans underlying the bonds. Fannie and Freddie claim they have already lost in excess of 20 percent of their entire investment.

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Association of Mortgage Investors Expresses Grievances

The Association of Mortgage Investors has sent letters to a handful of large banks expressing concerns on behalf of its members who hold residential mortgage-backed securities certificates. The mortgage investors called for enforcement of repurchases based on what they described as ""significant breaches"" of representations and warranties that have been discovered in the underwriting of loans, and voiced concerns that servicers are putting more effort into modifying their own loans than those of investors.

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BlackBox Logic Signs Academic Clients and Expands Coverage to U.K.

BlackBox Logic, LLC recently entered into agreements with several prominent academic institutions and faculty members to provide researchers with data on U.S. and international residential real estate and capital markets. In addition, BlackBox recently expanded to offer data covering residential mortgage backed securities (RMBS) in the United Kingdom, with plans to expand that service to other European countries.

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LPS Applied Analytics Introduces Home Price Index

The Applied Analytics division of Lender Processing Services, Inc. recently introduced the LPS Home Price Index (HPI). The LPS HPI shows historical price trends for residential properties in the United States, offering estimates of property values that underlie residential mortgage portfolios and securities. LPS says the new tool is a reliable way to estimate borrower stress, negative equity, and potential for default and loss.

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