Last year proved a boon for private mortgage-backed securities investors.Nonconforming collateral, such as adjustable-rate mortgages, surged in demand and yield. Moreover, any upticks in interest rates…
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February remittance reports posted a 0.5 to 1.5 point drop in the liquidation speeds month-over-month for the ABX subprime indices as well as mixed liquidation speeds…
Right before the housing crisis, Goldman Sachs Group [stock GS] [/stock] bet against subprime mortgages to spare the company major pain. But now the firm is…
Analysts at both Bank of America Merrill Lynch and Capital Economics forecast another 3% fall for house prices before they reach a bottom at the end of the year. While homes on the lower-tier price range will get there faster and at a much harder fall, a housing recovery is in sight, analysts said. Tiers are based on the Standard & Poor’s/Case-Shiller index and are determined by the prices of the homes sold that month. The price splits occur where an equal number of homes can be placed in each tier.
A new report compiled by lawmakers on the financial crisis leaves no stone unturned and blatantly criticizes the Office of Thrift Supervision for its “reluctance to interfere with unsound lending and securitization practices.”
One day after announcing the launch of a European ABS performance monitor, financial services company Markit is putting together another European-based index with residential and commercial mortgage backed securities (RMBS, CMBS) as eligible collateral.
(Apologies: “opacity” doesn’t have the same ring. If you prefer, this is the KISS article, for Keep It Simple Stupid.)
Subprime-mortgage securities are rising at an accelerating pace as the US begins to encourage reductions to homeowners’ balances, which may lead to fewer foreclosures and a quicker end to the housing slump. A Markit ABX index of credit-default swaps tied to 20 subprime-loan bonds rated triple-A when created in the first half of 2006 climbed 3.2% last week to 49.1, the highest since January 2009, according to Markit Group.
Barclays Capital (BarCap) researchers brought investors good tidings and peace of mind with market commentary this week that indicated the rolling out of a new family of asset-backed securities (ABS)-related indices should not pressure cash prices any lower. A set of credit default swap (CDS) indices based on triple-A jumbo and Alt-A bonds will soon rollout into the market, after a vote by the dealer community last week. The indices, similar to the ABX indices, will be called ABX.Prime or PrimeX.
Investor demand for non-agency or private-label residential mortgage-backed securities (RMBS) is overwhelming the current supply, according to global asset management firm Smith Breeden Associates. Appetite for private-label brought prices for some prime and Alt-A RMBS mortgages as much as $10-20 since the March lows, while some tranches in the ABX index — representing a range of subprime securities — rose more than 25% since March. Investors include dealers, hedge funds, real estate investment trusts (REITs), banks, insurance companies and money managers.
I know, I know. Subprime is so, like, 2007. And most of the financial press has moved onto sexier mortgage words like “option ARMs,” or “FHA loss reserves.” That said, I thought it would be interesting to dive back into subprime waters, taking a granular look at individual deal performance using November remittance data from that old standby, the ABX. (For those that don’t recall, the ABX index was launched by Markit in 2006 to track the private-party subprime RMBS market — and it allowed some hedge funds an easy mechanism to short the market for subprime mortgages.)
A look at the stories on HousingWire’s weekend desk…with more coverage to come on bigger issues: The industry buzzed this weekend over news of continued heavy losses at the government-sponsored enterprises (GSEs).