First Quarter, 2011
In this Issue
In 2011’s first Quarterly Issue of Perspectives, MIAC takes a close look at the health of both the US and European markets from multiple angles since the beginning of the year.
The latest news from Washington is the Federal Housing Finance Agency’s (FHFA) Initiative to review and alter the Residential Mortgage Servicing Rights (MSR) fee structure. Robert Lee and Mike Carnes, Senior Vice President, and Senior Vice President respectively of MIAC’s Capital Markets Group, provide a comprehensive look at the pros and cons of changing the MSR fee in our lead article. Through their thoughtful analysis, Rob and Mike offer a unique solution for matching MSR fees to borrower credit profiles and lender performance. This is an issue about which no lender should be caught unaware, and one for which MIAC offers a thoughtful analysis. Read more...
Dean Hurley, Senior Vice President, Capital Markets, provides an update on the Eurozone’s economic health. With Europe at a critical tipping point, the recent sovereign debt crises continue to have negative impacts on a recovering economy. If the situation is managed well, the results will be most fortunate for the Eurozone. If not, there is a dark cloud of returning uncertainty ahead. Read more...
Mike Carnes, Senior Vice President, Capital Markets, provides a comprehensive look at the Residential MSR market, with a rear view look at 2010 and a market projection for 2011. Read more... Rounding out the MSR picture, Dan Thomas, Managing Director, Client Solutions Group reviews the commercial MSR market, also providing thoughts on the market outlook. Read more...
The US housing market continues to be a focus of attention for investors across all credit sectors. Its importance to the health of the broader economy is clear. Roy Park, Senior Vice President, Capital Markets, provides a bird’s eye view of the housing market, focusing on recent history and the near term outlook. Find out why further declines in housing markets and the time before a significant rebound in home prices occurs may be greater than initially thought. Read more...
Dean Hurley, Senior Vice President, Capital Markets, takes a close look at the US commercial real estate market, which appears to be in recovery. Nonetheless, this geographically uneven recovery continues to be tested by Mideast shocks. Dean’s analysis highlights a leveling off of CRE delinquency, but also reveals why current problem loan rates are at the highest levels since the early 1990’s. Read more...
Finally Rob Fear, Director, Client Solutions Group, provides detailed insight into the appropriate methodology for Determining Haircut/Margin Requirements for Whole Loan Collateral. Rob explains why the calculation of the appropriate haircut or margin to use when lending against mortgage whole loans pledged as collateral is not unlike the process involved when performing a bank “Stress Test”. Learn why the only way to truly estimate worst-case scenarios for whole loan collateral is by proactively calculating the effect of negative shocks on loan values. Read more...
MIAC’s mandate is to provide our clients with the best tools and comprehensive market knowledge they require to be successful. This issue of Perspectives continues that commitment. We trust this selection of articles provides needed focus on a clouded economic horizon. As always, we welcome your feedback.
David McCraw, Perspectives Editor
www.MIACAnalytics.com
80 Maiden Lane, Suite 1401,
New York, NY 10038
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