Interest rates continued to stay low with the 10T hovering around 3.15%. Energy inflation seems to be transitory and inflation expectations are generally well anchored. Investors are still pouring into treasuries in search of safety and yield and shunning stocks. Gobal uncertainty in Greece and Spain is helping demand for U.S. treasuries. Banks are coming under intense scrutiny from the New York A.G. for activities in the securitized bond market. The executive and legislative branches of government continue to play chicken with the debt ceiling. They could use a man like Harmon Killebrew to lead the unleadable to a resolution. Rest in peace Killer. The world has lost a true gentleman. The E.U. is questioning the banks that comprise the LIBOR calculation for collusion. That would be a masterpiece of collaboration if it’s true. The CMBS market is percolating with new pools by JP Morgan, Wells Fargo and RBS in the works. 13% of residential mortgage holders are more than 30 days delinquent and the CMBS delinquency rate climbed to 9.2%. Both are still too high. Finally, the SEC announced plans to tighten rules on credit rating agencies. For borrowers this means longer closing timelines, high costs to pay for more legal time for rating agencies, and lengthy delays and increased costs for securitized loan modifications. Borrowers across the spectrum will pay for these new rules. It’s just a pass through for the rating agencies.
- Illinois plan to cut mortgage debt is making waves (marketwatch.com)
- Rating agencies, Dodd-Frank and the ABS market (ftalphaville.ft.com)
- CMBS May See Partial Exemption in New Loan Rules (blogs.wsj.com)
- CMBS issuance update and the B-piece buyer problem (ftalphaville.ft.com)
- The New CMBS and the Question of Risk (observer.com)