Morningstar Credit Ratings, LLC Affirms its &#39MOR CS1&#39 Industrial Mortgage

Morningstar Credit Ratings, LLC Affirms its &#39MOR CS1&#39 Commercial Mortgage
Extensive audit plan far more aligned with its parent audit needs: Midland has enhanced upon its already complete audit system by aligning the depth of review with its parent bank&#39s audit program. As a outcome, Midland undergoes … with …
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The Volcker Rule . . . finally
Importantly, the definition now carves out commodity pools with operators relying thede minimis exclusion and exemption in CFTC Guidelines four.5 and 4.13, which includes particular true estate funds and specific securitization autos, to the extent they are not …
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Fannie Mae, Freddie Mac Net Income Hits Record Higher: FHA
Frequent Securitization Platform. In recognition of legislative demands for adjustments in the housing and securitization infrastructure of the future, the FHFA directed the Enterprises to establish a Widespread Securitization Platform, major to the …
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can you inform me if i have understood this paragraph on banks and credit and mortgages right ?

Query by oops: can you tell me if i have understood this paragraph on banks and credit and mortgages right ?
PLEASE Study THE PARA Very first

SIVs utilized brief-term industrial paper, sold at low interest prices, to buy longer-term mortgage-backed securities and other instruments with higher prices of return. With the seizure of the credit markets, many SIVs had trouble selling new commercial paper to replace upcoming obligations on older paper. The collapse in sub-prime mortgages and in the commercial paper that supported them has basically adjusted the value of the principal to make up for the outsized returns that these investors got more than the past five years.

The money that banks owe on their commercial paper didn’t modify. These banks are going to supply more industrial paper to purchase mortgage assets in other words, they are going to borrow more quick-term income in order to purchase lengthy-term assets from themselves! That is, if they can borrow the funds in the 1st spot. One particular of the casualties in the rout was the industrial paper marketplace investors are realizing that it backs a lot of lousy mortgage debt, so they are backing away from investing in the industrial paper that backs the mortgages.

NOW – IS MY UNDERSTANDING Appropriate ?

Borrowed cash – The SIVs sold brief-term commercial paper at low prices of interest – so they borrowed cash for a ST at a low IR. They did this routinely to maintain receiving funds.

Lent money – The banks told the folks that we will give you income – mortgage your house at 12 % IR. ( Or the banks purchased mortgage investments from investors.) The banks took the less expensive loans from CP and invested it in longer term mortgage-backed securities and other instruments with greater prices of return.

But when the market collapsed, the value of the home collapsed, borrowers could not pay loans and higher IR, and the bank was left with a property which was not worth 25% of the loan they had provided. Oversized interest prices frequently imply that the investment is in reality sucking money out of principal. Occasionally investors can get away with the gambit for awhile, but sooner or later somebody pays the bill.

Secondly, with the seizure of the credit markets, a lot of SIVs had difficulty selling new commercial paper to replace upcoming obligations on older paper.

Thirdly, The income that banks owe on their commercial paper didn’t modify. Sounds like problems.

Now the banks have paid Rs 100 to the borrower, in return they have a house which is worth Rs 20. How do the banks cover the balance Rs 70 ? These banks are going to offer you far more commercial paper ( and take ST loans at low IR ) to buy mortgage assets in other words, they are going to borrow much more short-term cash at low IR in order to purchase extended-term assets from themselves!

That is, if they can borrow the money in the initial place. A single of the casualties in the rout was the industrial paper market place investors are realizing that it backs a lot of lousy mortgage debt, so they are backing away from investing in the commercial paper that backs the mortgages.

Greatest answer:

Answer by BobWang
An important aspect is the total lack of faith in SIVs, CDOs, and the agencies that purport to price them.

[Quote]
Most of these are mortgage-primarily based securitizations, such as CDOs. The cause for the common gun-shyness is since no-one particular knows what’s in them. This point was produced final Thursday evening on CNBC, where Thomas Patrick presented a strategy to take the performing mortgages out of CDOs and SIVs at par. It was shot down by CNBC reporter Charlie Gasparino on the grounds that performing mortgages might not execute at all in the future. Due to the fact no-one knows what’s in these securitizations, they’re not actually buyable. This impression explains why mortgage-rooted CDOs and SIVs are promoting way under what their present money flow indicates, a disparity that Mr. Patrick’s program depends on.
[/Quote]

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Is the term ‘credit crunch’ a psychological scare? ?

Question by journalistneil: Is the term ‘credit crunch’ a psychological scare? ?
Ok, so the planet is at present experiencing a monetary crisis. Everybody knows it and is feeling the pinch. I am myself.

But where did the term ‘credit crunch’ originate? When was it very first used? I hate hearing the term personally, I uncover it irritating. Is it just psychological? Are firms employing this as an excuse to raise costs and governments to raise taxes?

I am interested to hear your views. I am not suggesting it doesn’t exist, just wondering if it is getting exaggerated by over use?

Ideal answer:

Answer by src50
No. the credit market freezeup is genuine – albeit triggered by excessive effortless credit and improper securitization of that debt.
The term “bailout” is a misnomer.

What do you feel? Answer under!

How was the United Kingdom affected by the Credit Crisis in 2008?

Question by Jay: How was the United Kingdom affected by the Credit Crisis in 2008?
I am currently working on a term paper regarding the credit crisis impact on the UK. I understand prior to the credit crisis, the UK banking system derived there cash flows from securtization and the financial markets. Most of there operations were not derived from deposits. I am trying to find out if this market securitization that the UK was involved in came from the US sub-primed mortgages or other debt’s. If any one can explain this and how the ties between the UK and US were related. Also, I relized that the UK, besides the US, had a smaller decrease in there Stock Market when compared to other countries like China, India, Canada and others for the year ending of 2008. The UK and the US fell around the same amount which was approximatly 31%. Any help on this is greatly appreciated!!

Best answer:

Answer by Dating-Expert
UK was seriously affected by Credit Crisis
Many financial institutions collapsed, many retailers closed their businesses such as woolworth etc
Hundreds of thousands of people lost their jobs
employees in public sector got their salary increment frozen
in short it affected almost every single person in one way or another

Give your answer to this question below!

Q&A: Is this the beginnings of a world wide central bank or worse a private takeover of world credit supplies?

Question by bimma b: Is this the beginnings of a world wide central bank or worse a private takeover of world credit supplies?
http://news.yahoo.com/s/ap/20080915/ap_on_bi_ge/banks_plan

Best answer:

Answer by krollohare2
No. Foreigners have had their fingers in our pie for years. Maybe if we stopped buying from overseas and making our own stuff, they’d have to cash out eventually and use that money to buy what they need from us.

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a companies acceptance of credit cards like visa is an expample of ?

Question by Kristen S: a companies acceptance of credit cards like visa is an expample of ?
securitization
factoring with recourse
discounting
factoring without recourse

Best answer:

Answer by googie
Marketing Question ? Mid -term Exam? Security is the main reason. The amount of the clients purchase is known. It is scribed into the credit card’s approval activity,with the amount to be charged, Visa approves the amount and the customer gets the goods.So now, instead of every retailer carrying receivables, the credit card people assume the risk, and receive a percentage for their work. Visa is in effect factoring with recourse. If any problems arise Visa charges back the amount to the retailer.

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how hard is it to get a mortgage now if you have decent credit, no down payment,?

Question by baebeecakes: how hard is it to get a mortgage now if you have decent credit, no down payment,?
a good credit score, and 2 years job employment? is it harder now with all the foreclosures?

Best answer:

Answer by chatsplas@sbcglobal.net
Difficult. Yes, harder now than before–that’s why there are all the foreclosures. Frequently peolpe without a down payment aren’t good credit risks and shouldn’t be buying a home–that’s why the foreclosure rate is climbing. Start saving, putting money aside. You need a down payment even with the good credit and stable employment record.

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Credit Securitization: how exactly does it work?

Question by Dang: Credit Securitization: how exactly does it work?
Say I have a portfolio of 100 credit card customers, what are the technical steps to securitize it? E.g. how do I do the following:

1) Data Mining
I assume the first step is some sort of database/spreadsheet (MS Excel?) with the debtors info, how does one quickly sort what slots in each tranche? Some sort of macro/algorithm?

2) Credit Rating
How does one benchmark what the risk of the tranches are? Do I simply go to Moodys and ask them to look at them and that’s it??

3) Issuance
Once we have a plan of which receivables we want in each tranche, what then? Do we go to a legal firm to issue the bonds?

Team Size Required:
How many people would I need in a small securitization team? What sort of experience would they require if we were just doing basic credit card pfolio?

Basically I am looking to set up my own niche securitization venture…I have no background in securitization though!

Thanks!

Best answer:

Answer by ADAM S
Read This : – ” Credit Card Securitization – An Overview ”

Here : – http://www.flixya.com/post/GOLDCash360/767657/

.+.

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Q&A: Are we foolish to trust the credit reporting agencies?

Question by Joe in texas: Are we foolish to trust the credit reporting agencies?
Since they do not use debt/equity ratios or income amounts to calculate credit risk.
The credit rating agencies gave a high rating to institutions with bad loans given to unworthy borrowers in the sub-prime mortgage mess. Are the consumer credit rating agencies creating a bigger disaster with their voodoo credit rating system?

Credit rating agencies are now under scrutiny for giving investment-grade ratings to securitization transactions (CDOs and MBSs) based on subprime mortgage loans.

Is concumer credit the next crisis?

Best answer:

Answer by heybulldog
Trust isn’t the right word.

The sub-prime mess came about from fico score lending. They lent people money based on a stupid score and not looking at the person behind the number.

Building credit is the biggest joke of the 21st century.
It will bring nothing but debt.

We have enough Government in our lives.
The Government is not gonna fix you. You are.

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