Archive for April, 2010
MBS End Week At Best Price Levels Since Fed Was Buying Mortgages
Posted by: | CommentsPosted To: MBS Commentary
4.5's close 10 ticks up at 100-27 10yr notes bottomed out at 3.659 Secondary Market Current Coupon -5.3bps at 4.374%. Prices Higher But Yield Spreads are Wider CC +71.5bps/10yrTSY Stocks Tanked, but again, still inside a recent range. S&P -1.66% at 1186 How long will it last? For only being 10 ticks up, MBS "felt" like an insane rally. Maybe that's because the rally started out at what had been a huge previous turning point, or maybe because it's the end of a month that has seen MBS do pretty much nothing but go up (granted, with plenty of "back and forth" but just think "2 steps forward one step back"). Well… The chart'll tell ya. Look! See April? If you have really blurry vision, it looks like a diagonal line moving up up up. How about that…(read more)
When Bank of America (NYSE:BAC) Countrywide Financial, concerns were raised about the liability they were buying with that deal, and that fallout continues to rise, as the latest case involves a fraud claim from one of the units of MBIA Inc. (NYSE:MBI) over billions in home-equity lines of credit which had been securitized.
Other elements of the decision included the dismissal of a negligent claim of misrepresentation, while a breach of contract claim has yet to be ruled on.
Bank of America spokeswoman Shirley Norton noted, “This is a procedural ruling and not a ruling on the merits or facts of the case. We will continue to vigorously defend against the allegations.”
The lawsuit centers around what MBIA asserts were lending practices at Countrywide which had been changed at the core and resulted in the risk in relationship to their loan portfolio being much higher than they were aware of.
There are 15 pools of home equity lines of credit which had been securitized that are part of the case going forward.
MBIA said this about the judges decision:
“We are pleased that the court has allowed our case to move forward against both Countrywide and Bank of America. Importantly, the judge recognized the validity of our position that there was a de facto merger between Countywide and Bank of America. MBIA has been substantially harmed by Countrywide and Bank of America and we will continue to pursue all available remedies.”
MBIA provided financial guarantees on these pools of securitized home equity lines of credit in the billions, and are trying to pass some of that liability onto Bank of America through this lawsuit for the reasons cited.
This article (Bank of America (NYSE:BAC), Countrywide Financial Ordered to Defend Against Fraud Claims of MBIA Inc. (NYSE:MBI)) was originally developed by and is property of American Banking News. Checkout American Banking News for up-to-date banking news and peer to peer lending news.
Citigroup’s (NYSE:C) Richard Stuckey to Retire After Cutting Toxic Assets
Posted by: | CommentsCitigroup (NYSE:C) announced Richard Stuckey has stepped down from his position as head of the Special Asset Pool where he oversaw about $241 billion in bad bonds and mortgages which he has trimmed by close to half since January 2009, at which time he was named to the role.
In an internal memo, Citigroup said that Stuckey has stepped down from the head of the unit, but will stay on as an adviser until the latter part of 2010, when he will retire. He is staying on to help with the transition period.
Replacing Stuckey will be Aloysius T. McLaughlin, who has headed up sales of newly issued asset-backed securities and investment-grade bonds at the bank since 2000, with bonds being added to his responsibilities in 2005.
As of the end of March, Stuckey shrunk the size of the toxic assets to $126 million. Citigroup has been using the Special Asset Pool to downsize the company after the bailout of $45 billion resulted in pressure from the government to cut back on their size. They’ve also been divesting of other non-core assets to meet those demands as well.
The overall asset pool under the umbrella of Citi Holdings was $503 billion, which included the Special Asset Pool we’re talking about and lending properties related to student loans and auto loans, along with CitiFinancial and other company assets.
This article (Citigroup’s (NYSE:C) Richard Stuckey to Retire After Cutting Toxic Assets) was originally developed by and is property of American Banking News. Checkout American Banking News for up-to-date banking news and peer to peer lending news.