Tag Archives: Mortgage-Backed Securities

On the same day that Federal Reserve Chairman Ben Bernanke cautioned lawmakers about their fiscal behavior and hinted at more stimulus measures, one of the Fed├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós governors, Sarah Bloom Raskin, outlined potential peril in the mortgage servicing industry. The Fed chief noted ailing health in the economy while the other official sketched a need for change in servicing standards. News reports found the 30-year Treasury bond yields leaping forward on the promise of action by the Fed chief.

Real estate investment trusts are making headlines again, on the news that the Federal Reserve will continue to drive long-term interest rates even lower. High yielding REIT stocks have dropped accordingly, and the REIT market, which thrives on borrowing at lower rates and lending in the mortgage marketplace at higher rates via the purchase of mortgage-backed securities, has struggled. Many industry analysts note that the segment's avoidance of any default risk should offset the instability caused by interest rate fluctuation.

Bank of America Corp. will continue to be under investigation, following a recent filing that alleges the big bank failed to properly inform investors as to risk factors associated with a pending lawsuit from American International Group. Hagens Berman announced that it will advance its look into BAC's investor dealings surrounding the bank's legal issues with AIG. BAC shares dropped significantly in the wake of the AIG filing, and it's estimated that the full damages equate to around 20 percent per share.

A suit filed Monday dispelled any notion that the Taylor Bean & Whitaker scandal ended with the lockup of the former ringleaders, according to multiple news reports. The trustee overseeing bankruptcy and liquidation proceedings for the now-defunct mortgage company went after auditors for failing to see red flags in their accounting processes. Deloitte & Touche LLP, the accounting firm responsible for audits at Taylor Bean & Whitaker, got slapped with suits on the hunt for $7.6 million in damages, according to news outlets.

Bank of America green-lighted another restructuring move Friday, with news breaking that the mortgage giant signed off on an $880-million selloff in commercial real-estate loans. Multiple news reports held that the portfolio, worth about $1 billion to a cluster of investors, will benefit from a bevy of discounts. Who benefits? According to multiple news outlets, a venture created by Canyon Capital Realty Advisors LLC, Invesco Ltd., and Square Mile Capital Management LLC will sop up the loans.

With single-family home sales lagging and more households struggling with debt issues, the Mortgage Bankers Association alleviated few concerns about the industry with news Thursday that mortgage debt outstanding for commercial and multifamily properties rose half a percentage point to hit $2.4 trillion over the second quarter this year. Multifamily mortgage originations are typically those used to finance new rental purchases. The trade group signaled a roughly $4-billion thrust upward in debt outstanding for both loans.

In a surprise move, Moody's Investors Service slashed credit ratings for mortgage giants Bank of America, Citigroup, and Wells Fargo Wednesday afternoon, citing concerns that the federal government may not rush to pick up their remains and bail out the institutions in another liquidity crisis. Critics and advocates of the Dodd-Frank Act used the downgrades to alternately justify the legislation or undermine it in the national square. The downgrades arrive amid a slew of bad times for the nation├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós largest mortgage lenders.

Federal Reserve Chairman Ben Bernanke again made waves Wednesday with an announcement that the central bank plans to sell $400 billion in short-term Treasuries to keep a heel on still-low interest rates and offset widespread fears that the U.S. economy may soon enter a downturn. The move follows successive efforts from the Fed, which more recently pledged to keep interest rates low until 2013. Speaking with MReport, economists largely panned the effort.

Treasury special adviser Raj Date made headlines again after announcing Tuesday that the Consumer Financial Protection Bureau plans to finalize the ability-to-repay rule early next year. His remarks follow a series of other barnstorming speeches in the ramp-up for several rules. Once approved, the new rule, formerly proposed by the Federal Reserve, will broaden the scope of Regulation Z under Truth-in-Lending and prevent lenders from making loans to consumers without qualifying assets and income.

Commercial real estate loans are making Wall Street headlines again. Joint financing options are becoming increasingly abundant for financial firms struggling to handle the fall out from recent volatility in the commercial mortgage-backed securities market. During the summer, yields rose steadily, increasing the need for investor protection measures. As part of events underway, Barclays CApital announced a partnership with FundCore Finance Group to conduct CMBS loans jointly.