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The RMBS securitization process of 2005-2007 and its progeny are deeply flawed on at least three different levels: * Collateral--representation and warranty violations * Defects in the deal closing process [...]

The largest single problem in the U.S. mortgage market is the number of borrowers who owe more money on their home than it can be sold for. These borrowers with [...]

The big question in the mortgage market is, Will the next wave of defaults be driven more by unemployment or by negative equity? The answer is very important, because policy [...]

Option ARM loan performance has been, and will continue to be, simply awful, but the pricing of the securities fully reflects this, and at current prices these securities have value [...]

The cash flows on private-label securitizations are very difficult to predict, and this uncertainty can make a large difference in the yield on the security. This article highlights a number [...]

One of the largest sectors of the European fixed-income market is the covered bonds market. Covered bonds are a financing mechanism, for bank originators of residential mortgages and other assets. [...]

The ongoing credit crisis has left many participants in securitized product markets badly burned. Some have forecast that CDOs, once touted as brilliant innovations, are headed for the financial graveyard. [...]

Rating agency repute is at an all-time low following the subprime meltdown of the summer of 2007. The necessity of massive mortgage bond downgrades, so soon after issuance, obviously reflects [...]

The impact of subprime bond downgrades on collateralized debt obligation (CDO) pricing continues to remain a source of uncertainty, but two aspects are clear--many asset-backed security (ABS) CDO collateral assets [...]

Constant Proportion Debt Obligations (CPDOs) are best described as an investment strategy rather than an asset class. When they first appeared in August 2006, the asset on which CPDOs focused [...]

Securitization is an important financing vehicle for financial and non-financial entities, and an important technique for controlling interest rate and credit risks. The first securitization was guaranteed by a government [...]

A collateralized debt obligation (CDO) issues debt and equity and uses the money it raises to invest in a portfolio of financial assets such as corporate obligations (bonds or loans) [...]

In the last few years, fixed-income market participants have become quite aware that certain activities of mortgage market participants amplify movements in Treasury rates. That is, there are fundamental factors [...]

Recent rating agency reports attack a long-held assumption of participants in the structured finance market: that asset-backed securities (ABS), commercial mortgage-backed securities (CMBS), and residential mortgage-backed securities (RMBS) have lower [...]

Secondary trading in the collateralized debt obligation (CDO) market came into its own in 2003 and has continued at a robust pace in 2004. One reason is the significant increase [...]

Equity in a collateralized debt obligation (CDO), called 'CDO equity,' 'preferred shares,' or 'preference shares,' represents a residual interest in the cash flow of the CDO's assets. CDO equity holders [...]

A collateralized debt obligation (CDO) is a security backed by a diversified pool of one or more classes of debt. Asset classes that have been used as collateral for a [...]

High default rates in the high-yield bond and loan market in general, and among collateralized debt obligation portfolios in particular, have caused some CDO tranches to stop paying current interest [...]

Equity tranches of CDOs (collateralized debt obligations) have historically had only a limited buyer base. They have tended to be purchased by the narrow base of institutional fixed income portfolio [...]

Secondary trading in the collateralized debt obligation (CDO) market came into its own in 2003 and has continued at a robust pace in 2004. One reason is the significant increase [...]

Equity in a collateralized debt obligation (CDO), called 'CDO equity,' 'preferred shares,' or 'preference shares,' represents a residual interest in the cash flow of the CDO's assets. CDO equity holders [...]

Interest rate options are a potentially valuable tool for managers of financial institutions. In particular, they offer greater flexibility in terms of risk management than can be obtained from combinations [...]

Defeasance allows a corporation to remove debt from its balance sheet by securing the debt with U.S. government securities. This improves the corporation's debt-equity ratio.The practice may increase demand for Treasury securities., The Financial Accounting Standards Board's issuance of a new accounting standard on defeasance on Nov. 29 has produced much discussion among corporate treasurers and bankers. Defeasance is a liability management [...]