Secondary Market for Buying and Selling Mortgage-Backed Securities (MBS) - Residential Mortgage-Backed Securities (RMBS), Commercial Mortgage-Backed Securities (CMBS), Alt-A, Jumbo loans, and Sub-Prime

Mortgage-Backed Securities

Market Description

Mortgage-backed securities (MBS) are debt obligations that are backed by the cash flows from pools of mortgage loans on residential and commercial property. SecondMarket's MBS Market facilitates transactions primarily in two areas of the mortgage-backed space: non-agency Residential Mortgage-Backed Securities (RMBS) and Commercial Mortgage-Backed Securities (CMBS), together representing approximately $2.5 trillion in securities. The agency RMBS market, due to a combination of implicit and explicit government guarantees, continues to function in an orderly manner, with tight bid-ask spreads and a significant number of market participants. Non-agency RMBS, however, have come under significant pressure not only from the downturn in housing prices and the fallout from the sub-prime mortgage crisis but also from a variety of legal and regulatory changes/proposals that have caused considerable uncertainty regarding the future performance of the underlying loans. The CMBS Market has seen increased stress and dislocation as well with deteriorating economic trends. SecondMarket has leveraged its technology and deep buyer base, adding MBS data and analytical tools to centralize price discovery and trading in a wide variety of CMBS as well as RMBS backed by prime (jumbo), subprime, alt-A, option ARMs and home equity loans.

Mar 9 2010

Harrah’s Wins Relaxed Terms on $5.5BN in CMBS Debt — online.wsj.com

Harrah’s lenders agreed to amend term of $5.5BN in loans
Casino operators similar to Harrah’s had large debt expanding in years leading up to real-estate and economic downturn

Mar 3 2010

Fannie Mae to “Significantly” Increase Delinquent- Loan Purchases — online.wsj.com

Fannie Mae will increase its purchase of loans from single-family mortgage-backed securities that are at least four months delinquent
At end of 2009, Fannie had about $127 billion of loans in single-family MBS

Feb 12 2010

Fed in Talks with Money Market Funds to Help Drain $1 Trillion — www.bloomberg.com

Federal Reserve is talking to money-market mutual funds in order to help drain $1 trillion from financial system as they prepare for first interest-rate increases since June 2006
Central bank is responsible for creating more than $1 trillion in excess reserves by purchasing $300 billion of Treasury debt and $1.25 trillion of mortgage-backed securities