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’Awaiting the MBS settlement fail fee
It’s been a while since FT Alphaville looked at settlement fails, but the following chart from RBC Capital Markets did catch our eye this week:
As RBC notes, there’s a new settlement failure fee coming into force in the US for MBS securities on February 1,
Nomura on European bank deleveraging and US loans
Nomura has a new report showing that US loan growth is having a good quarter thus far, even after accounting for the normal seasonal boost, but what caught our eye was the excellent series of charts on the activities of foreign bank subsidiaries in the US.
Another reason the Fed might buy MBS
If you’ve been following reports of what might happen at next week’s FOMC’s meeting, you probably know that the Fed is contemplating further purchases of agency mortgage-backed securities.
And there are least two,
(Settlement) failure is an option
What if the persistent number of settlement fails was deliberately done?
A sort of unconventional financing for the market participants doing the failing, if you will.
It’s not far-fetched. We know that back in 2008 for instance,
Is the debt ceiling drama really all about the GSEs?
You’re looking at an excerpt from the 2008 Housing and Economic Recovery Act. That’s the thing which created the Federal Housing Finance Agency (FHFA), which is currently charged with regulating the US’s massive Government Sponsored Enterprises (GSEs),
Subprime selling off, again
Securitised subprime — it’s still not doing well.
While synthetic indices like the the ABX and CMBX have partially recovered from lows reached in the spring, non-agency Residential Mortgage-Backed Securities (RMBS) remain in the gutter.
ABS, CDS and various other acronyms in Australia
Your daily dose of financial innovation, right here.
Flexi ABS Trust 2011-1 may be a structured finance deal you’ve never heard of, but it’s making waves amongst securitisation types in Australia. Put simply it’s the first ever Australian deal to bundle interest-free payment plans for retail goods like jewellery,
The supply! The supply!
Maiden Lane’s no lady. She continues to harass Wall Street.
The Federal Reserve has been selling off the portfolio of dodgy Mortgage-Backed Securities (MBS) it acquired as part of its bail-out of AIG.
Choose your own MBS accounting
Basel III. Accounting. Mortgage-Backed Securities. Yawn.
But wait — Basel III’s attempt to incentivise banks into managing their interest rate risk could be about to permanently alter the way banks handle some $1,480bn worth of MBS,
The other (missing) side of risk retention?
Risk retention is all about ‘aligning the incentives’ of various securitisation players.
But CreditSights analysts reckon regulators may have grabbed the wrong end of the securitisation stick, so to speak,
Interest rate risk hurts — hurts like a 9 per cent market value loss
The mortgage market — lurching from one risk to another, right?
No sooner had Fitch Ratings gotten more comfortable with credit losses than it starts warning on interest rate risk. It’s kind of back to the future for the Mortgage-Backed Securities (MBS) industry too.
The RMBS risk retention exemption, qualified
US federal agencies on Tuesday published 233 pages of proposed rules around credit risk retention for sponsors of asset-backed securities, a requirement laid down in the Dodd-Frank legislation.
Sexy lede,
The Fed and its MBS portfolio
Interesting note, this.
It’s from the banks team at RBS and it looks at the reaction to Monday’s news that the US Treasury plans to sell $142bn of Mortgage-Backed Securities (MBS) purchased during the crisis as part of its Fannie Mae and Freddie Mac bailout.
Dual track no more
Nestled in the 27-page mortgage settlement term-sheet which surfaced earlier this week, is a clause that could have big consequences for mortgage investors.
It looks like this:
It’s been a while coming — but it looks like the US will move towards eliminating the process,
Are some traders gaming the system via settlement failures?
How worried should investors be about rising settlement fails?
In the opinion of the Kauffman Foundation, very.
A new study penned by among others Kauffman’s chief investment officer, Harold Bradley and vice president of research Robert E.
‘Banks may be the best holders of mortgage risk,’ says Deutsche
Or, why the private label mortgage securitisation market keeps failing to rise from the dead — especially as the US grapples with Fannie/Freddie reform.
Here’s the thinking, from Deutsche Bank’s Steven Abrahams:
A very messy Ambac lawsuit for JPMorgan
JPMorgan didn’t want this to be made public. You can kind of see why.
Quick background — the bank has been engaged in a legal battle with Ambac since November 2008. The monoline says EMC, Bear Stearns old mortgage-banking arm,
From Fed run-offs to super-sized Treasury auctions
From RBC Capital Market’s Michael Cloherty:
As we discussed last week, the Fed is likely to start shrinking its balance sheet by allowing maturing Treasuries to run off as early as the fourth quarter.
The full story of the Ibanez case
Back in 2005 in Springfield, Massachusetts…
What happened next currently has the mortgage and housing market palpitating.
US Bank filed a foreclosure complaint on the above loan, but soon found itself embroiled in a legal battle which would become known as the ‘Ibanez’ case.
Solving the second-lien sticking point
Remember this chart? It’s old, but still relevant.
Those are second-lien (or just plain second) mortgages held by US banks — also known as remortgages or home-equity withdrawals in the UK. The top four,
‘Focus on the positives’ of the Ibanez case, Amherst says
Should banks be trembling in their boots after Friday’s “Ibanez case” ruling from a Massachusetts High Court — you know, the one that said Wells Fargo and US Bancorp couldn’t foreclose on two properties in the eastern seaboard state.
And the financials all went down on Massachusetts
(Excuse the Bee Gees song reference, couldn’t help ourselves.)
As we have already noted, Wells Fargo and US Bancorp on Friday lost what could turn out to be a highly critical case regarding the general legality of bank foreclosures in the United States.
Open letter to a closed mortgage market
It looks as if his recent experience in the housing market has irked Nouriel Roubini (and friends).
Just making the DC Christmas post deadline Tuesday morning is a letter (H/T Politico) from the economist and a few dozen colleagues asking US regulators to develop national standards for originating,
Risk retention and RMBS
The San Francisco Fed has a new paper that tries to answer the question of whether mandatory risk retention for securitisers of RMBS is a good idea.
The short answer is ‘yes’. But for those among you who get excited by this kind of thing (we know you’re out there),
Goldman’s uneasy subprime short
In early 2007 Wall Street was in the early stages of the subprime crisis.
Spreads on the ABX indices, which had become synonymous with the crisis, were falling. And Goldman Sachs was about to do something which would eventually lead it to a $4bn profit and make it one of the last banks standing on Wall Street.
Your guide to the Fed’s $3.3 trillion data dump
Cast your minds back to 2007, 2008 and 2009 — and think hard.
You’ll need to. The Federal Reserve has just released the mother-of-all data dumps — showing who received payouts from its circa $3,000bn bailout programmes,
Fixing the MBS market, improving QE2
Are you one of the gazillions of people not concerned by surging MBS fails?
Perhaps you should be.
Fails to deliver of Mortgage-Backed Securities (MBS) reached an all-time record late last month,
The least ‘advanced’ mortgage servicers
The mortgage servicing biz is not coming out of the foreclosure scandal unscathed.
What was once a fairly steady industry — based on narrow margins but lots of volume — is suddenly having to rethink its business model.
Deutsche Bank on the perfect mortgage company
Foreclosure fraud! Robosigning! Repurchases!
How, as Mike Konczal noted a couple weeks ago, did mortgage servicers get it so wrong?
To answer the question it’s worth taking a look at a certain mortgage firm that may have got it right.