The New York Times rambles, and mangles mortgages along the way

The New York Times rambles, and mangles mortgages along the way

Mortgage finance and mortgage regulation aren’t the paper’s strong suits

WATCH: Trulia stages haunted house for unsuspecting homebuyers

'Tis the season. For screaming.

10 reasons why people don’t get a mortgage

It’s not just because of finances
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Current subprime bond yields impede private-label RMBS

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Legacy assets held by major lenders are trading so well on bond markets, the economics aren't right to issue new mortgage-backed securities from a yield perspective, according to the chairman of the American Securitization Forum. "There are 6% to 8% yields in the legacy subprime market, that's nonagency MBS, loss-adjusted yields," said Ralph Daloisio, also managing director at Natixis. "There is no economic incentive to generate a primary mortgage market." Daloisio said it appears the Obama administration is using the government-sponsored enterprises as a chief housing policy tool. The GSEs finance more than 90% of the nation's mortgages, and this may also have a systemic impact on the reformation of a private-label securitization market, he added. Nonetheless, this scenario is more or less obvious to secondary market players. "The market sees through the strategy, it sees the 'kick-the-can approach,'" Daloisio said, warning, "We may meet fate on the road we took to avoid it." A prior panel at the ASF annual meeting in Washington, D.C., said mortgage bond markets, as a whole, rallied from March 2009 through March 2011, but investors have since grow bearish on continual negative numbers concerning home prices. Write to Jacob Gaffney. Follow him on Twitter @jacobgaffney.

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