ABS & CDO Investment Losses
- Overview
- News Commentary
- Publication Articles - our lawyers quoted
- Blog
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- ABS & CDO Funds Under Investigation
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- Asset Backed Securities & Collateralized Debt Obligations
Overview
Asset Backed Securities & Collateralized Debt Obligations
On January 1, 2007, Thompson Financial categorized trusts containing first mortgage liens with credit score greater than 675 as Mortgage Backed Securities (“MBS”). Trusts containing first mortgage liens with credit scores less than 675 are characterized as Asset Backed Securities (“ABS”). All Alt-A (loans without documentation generally required by FNMA and FHLMC), subprime and second lien mortgages pools are categorized as asset backed securities. Obviously, the collateral utilized in structuring asset backed securities carries more risk of default and foreclosure than the collateral utilized in structuring mortgage backed securities. Mortgage backed securities and asset backed securities are often times referred to as structure financial products or structured securities.
News Commentary
Subprime Woes Hit Alt-A Mortgage-Backed Securities
There subprime mortgage crisis has spread to yet another segment of the credit market: Alt-A residential mortgages. Between subprime mortgages and prime mortgages, there is a middle ground category of loans.
Why the Subprime Mess is Far from Over — The Decline in Home Prices Continues Downward
Recent data showed prices of existing homes plunged nationally through 2007, ending the year down 8.9% - the largest decline in 20 years.
Variable Interest Entities Present New Subprime Risks
A new thorn is in the side of an already beleaguered Wall Street: Variable Interest Entities, or VIEs.
Concern Over the Pricing and Valuation of Subprime Securities Escalates
Over recent weeks there have been growing concerns over the pricing and valuation of subprime securities by the major investment banks. Such pricings and valuations have serious implications for investors in both the investment banks and the subprime securities market.
The CDO Process of Resecuritization
Illustration shows the process of Collateral Debt Obligation and how they are pooled into investments.
Fitch Ratings Downgrades Ambac Assurance. More to Come?
A new fissure in faltering credit markets hit Wall Street on January 19, 2008. That's when Christine Richard of Bloomberg.com reported that Fitch Ratings had downgraded the credit rating of Ambac Assurance Corporation's credit rating from AAA (the highest rating available) to AA.
Legal Coalition Represents Investors Caught in the Subprime Mortgage Mess
The subprime mess has exploded. But few law firms have the expertise and resources to represent investors who have suffered losses. To address the crisis, a coalition of 26 attorneys from four top securities law firms have teamed up to provide the resources needed for such complex litigation.
Subprime-Backed Securities Selling at Pennies on the Dollar — If They Sell at All
The actual market values of subprime-backed CDOs and similar securities have become apparent in recent weeks. The market has rendered these high-risk, ill-conceived investments essentially worthless.
Subprime Loan Risk Drastically Underreported; Wall Street Firms Under Investigation
Prosecutors in New York and Connecticut, along with the SEC, are examining evidence that Wall Street investment banks actively withheld material information about the risks inherent in investments tied to high-risk “exception” and other subprime loans.
Publication Articles - our lawyers quoted
CDOs and the Cities: Merrill's Legal Issues in Springfield May Lead to More Suits. Acknowledging Liability?
Posted: Monday, February 18, 2008
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