Tag Archives: RMBS

Prices on credit default swaps (CDS) involving subprime mortgages more than doubled their increase from last month, extending the rally to an unprecedented seventh straight month, according to the latest index results from Fitch Solutions. Subprime CDS prices rose 1.7 percent overall, though price increases were not uniform across vintages, with the 2007 leading the surge. Fitch says most vintages are in the black for the year. The lone negative outlier is the 2006 vintage.

Pro Teck Valuation Services, a real estate collateral valuation provider, announced Tuesday that Basil G. Pallone has joined the company as CFO. Basil will be responsible for all aspects of the company's financial operations, and has more than 25 years of financial management experience in public, private, and venture-backed companies.

Specialty servicer Ocwen Financial Corporation recently launched a new product to help buyers of non-performing loan portfolios or residuals of private-label securities get more value from their loans. A turnkey product, PlatformPlus allows distressed asset investors to set up their own specialty servicing operations using Ocwen's expertise and management.

Provided they live on in their current form, Fannie Mae and Freddie Mac will need another $42 billion from taxpayers over the next decade, according to the Congressional Budget Office (CBO). The agency says subsidies related to the GSEs' new business have fallen but they'll continue to need funding as long as their mortgage guarantees are priced below private institutions. CBO says the government faces two choices: either retain the GSEs' portfolios until the mortgages are paid off, or pay a private entity to assume the guarantee obligations.

Prosecutors with the Manhattan District Attorney's office have issued a subpoena to Goldman Sachs for information related to the company's trading of mortgage bonds backed by subprime loans. The action against the Wall Street institution stems from a congressional report issued in April by a Senate subcommittee on the key causes of the financial crisis. The U.S. Justice Department, SEC, and New York's attorney general have reportedly launched their own investigations into Goldman's dealings during the run-up to the mortgage meltdown.

Residential Credit Solutions announced Tuesday that it has issued a newly created asset-backed securitization comprised of residential loans and real estate. The secondary market offering carries a value of more than $110 million. Forty-four percent of the structure is collateralized with delinquent mortgages and REO properties and 46 percent is current mortgage loans.

Fannie Mae and Freddie Mac recently announced they will be issuing new guidelines this summer that will align their procedures for handling past due mortgages and implement a new incentive and penalty structure based on individual servicers' performance. Moody's Investors Service says this new directive - in particular the monetary motivation involved - will likely shift servicers' focus to loans backing the GSEs' mortgage bonds and away from loans in private-label residential mortgage-backed securities (RMBS).

Industry analysts, economists, even lawmakers generally concede that the pooling of risky subprime mortgages into secondary market securities fueled the economic collapse that almost brought the nation's financial system to its knees. But New York Attorney General Eric Schneiderman is looking for proof that major financial institutions were hocking these dicey mortgage-backed securities during the days leading up to the collapse of the housing market, knowing that these transactions would result in billions of dollars in mortgage losses.

House lawmakers have introduced a bipartisan plan that would replace Fannie Mae and Freddie Mac with a group of private firms to fill the role of issuing government-guaranteed mortgage-backed securities. The bill's authors say it would not only protect taxpayers but would ensure financing for home loans and products like the 30-year fixed-rate mortgage remain available to middle-class families. Market observers say the proposal is the only one so far that could win sufficient support from both sides of the aisle.

Clayton Holdings has partnered with MBSData to provide loan-level data risk identification analytics and reporting solutions to fixed-income-mortgage investors. According to a statement from the two companies, their combined technology platform is designed to help investors manage residential mortgage-backed securities (RMBS) risk more effectively. The new offering will cover 98 percent of the active deal universe of private-label RMBS.