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mbs: The Fed could make billions on MBS - mortgage-backed securities - 05/27/10 06:28 PM
When the housing market began recently unraveling at warp speed and quickly lugged the overextended mortgage industry along with it things looked quite bleak for the U.S. economy. Housing, after all, is one of its major components and should it be hit with a serious medical condition, taking a simple pain killer wouldn't help much. Then if ever, when the fury of the real estate sector's downturn became better understood, drastic action was called for.
The Federal Reserve bravely stepped forward intent on showing how it's done. Right on the heels of the private investor vanishing from the secondary mortgage market … (20 comments)

mbs: Mortgage fraud declining amid tightening underwriting criteria - 03/22/10 04:16 PM
When the notorious housing bubble was forming some years ago a lot of factors were aiding and abetting its run to those dizzying, unsustainable heights. One of them was mortgage fraud. Banks were so busy crafting new and glitzy home loan products and making money hand over fist with them that often they overlooked questionable mortgage loan applications. When opportunity knocks, it has to be taken full advantage of, seems to have been the going motto then.
But things have changed drastically in the mortgage world since the air rapidly hissed out of the bubble. Investors, who bought mortgage-backed securities, or … (4 comments)

mbs: Mortgage industry faces changes by new financial regulation bill - 03/16/10 04:59 PM
The home loan and real estate markets have been anxiously waiting for fresh initiatives from Washington to address the many shortcomings that led to the recent bust. For a time it looked as if not much was going to happen thanks to the fierce opposition from Wall Street for any meaningful reform. Housing industry officials and hard-hit consumers alike were getting restless over the inaction, and rightfully so. Everyone, except the irresponsible Wall Street operatives, seems support a rather serious overhaul.
Now that call has been answered. Sen. Dodd is behind the just-released lengthy financial regulation bill. It has some sections … (6 comments)

mbs: Home loan defaults caused largely by negative equity - mortgages in Las Vegas in the forefront - 12/14/09 11:04 PM
Mortgage and real estate market aficionados continue to debate how to fix this bone-chilling mess. While the back and forth is going on the government has taken a leading role in actually doing something. It had to act because the private sector - let's call it Wall Street - ran itself to ground, effectively scuttling the chance it could be of any help. Despite plenty of initiatives to stem mortgage foreclosures Washington has had limited success, however, in turning things around.
It seems that identifying the real problem has been botched, to put it bluntly.
So argues a seasoned MBS, or … (8 comments)

mbs: MBS, or mortgage-backed securities, rating agencies under renewed squeeze - 11/28/09 01:35 PM
The unprecedented real estate bubble the nation just experienced was partly created by the credit rating shops that were tasked to value mortgage-backed securities, or MBS. The three large agencies doing that are Fitch Ratings, Moody's Investors Service and Standard & Poor's. The ratings the three arrived at were then attached to MBS issued by Wall Street firms and subsequently offered to investors who were seeking to invest money based on their own risk preferences. Obviously what the large investors world over were seeing made them confident that MBS were sound and worth acquiring, so they bought boatloads of them, stoking … (50 comments)

mbs: Mortgage securities rating agency Moody's and the whole system under fire - 10/19/09 09:26 PM
Mortgage-backed securities, or MBS, played a pivotal part in the recent galloping real estate market and in its eventual and memorable collapse. These bonds get rated based on risk before they are offered for sale so that potential investors - pension funds, university endowments, international investors, among others - know what they are fiddling with. Moody's is one of the top three in U.S. to do that, the others being Fitch Ratings and Standard & Poor's.
When Moody's was spun off from Dun & Bradstreet early in the decade, the long-time corporate philosophy of honest and quality ratings was supplanted with … (4 comments)

mbs: Fed to continue buying mortgage securities into 2010 - 09/24/09 01:37 PM
The secondary mortgage market is the life blood of the massive housing industry. If it catches any kind of ailment, the consequences can be rather dire. A serious virus invaded it not so long ago - it can also be called the great escape of the private investor - and threatened to bring the besieged real estate market to its knees. Or worse.
The Fed had to step in to fill the void and started buying Fannie Mae, Freddie Mac and Ginnie Mae mortgage-backed securities, or MBS, to maintain liquidity. To give the housing industry a chance to work itself out … (2 comments)