April 2010

Last week marked the three-year anniversary of New Century Financial filing Chapter 11 bankruptcy, an event that I tend to point to as demarcating "the beginning of the end" and "the end" of the housing bubble, and representing the true beginning of the credit crisis.

Until first quarter 2007, New Century Financial stood as the second-largest US subprime residential mortgage lender (after Countrywide), having contributed significantly to the awe-inspiring $500-plus billion in subprime loans made in 2006. However, faced with a funding deficit when New Century’s lenders pulled back amid rising defaults on subprime loans, the company ceased lending operations in early March, 2007. The inevitable Chapter 11 filing followed quickly on April 2.Continue Reading Celebrating Three Years of Crisis

The Wall Street Journal and Bloomberg, among other outlets, reported last week that the Royal Bank of Scotland Group Plc is in the process of placing a multi-borrower securitization – the first such issuance to come to market since June 2008. Of course, RBS is facing several hurdles as it trailblazes once-familiar territory. The offering, variously reported to be between $300 and $500 million, would represent a significant tool for other banks in determining pricing for future multi-borrower deals. The offering will also serve as a measuring stick for investor demand in the post-TALF world.Continue Reading First Securitization Since 2008: No April Fooling