GLG News by Subprime Mortgage Experts (US)

Brian HershkowitzChief Executive OfficerMaximum Value Group

The Finger Pointing Continues In The Subprime World

January 28, 2008

Analysis of:Loan Reviewer Aiding Inquiry Into Big Banks | www.nytimes.com

This article is illustrating finger pointing looking for a villain, instead of "post-mortem" to find a hero.  What the industry needs is a clear plan for rebuilding the subprime securitization market.  In my opinion, a great part of that will be tied to the outsourced due diligence function, and the value those in that area add to the process.  One of the leading players in the space is now looking to be at odds with their client base. 

Brian HershkowitzChief Executive OfficerMaximum Value Group

The Real Shot In The Arm Is Buried In The Details - Mortgage Bankers Are Toasting Congress Tonight!

January 25, 2008

Analysis of:Congress Unveils Economic Stimulus Deal | biz.yahoo.com

The Economic Stimulus Act, approved today, will go along way towards its name, and stimulate the economy.  Questions of how much money, too whom, and what may have been sacrified in the cross-party negotiation will remain unanswered, but one thing is clear.  Congress has delivered a very potent set of stimulus to the mortgage markets.  By increasing the loan insuring (FHA) or purchasing (GSE's) authority to more than $700k, Congress answered a prayer and request of many of those in the industry.  The business people know that this gives them a very streamlined and efficient way to originate, fund, and deliver loans to the secondary market and service a large percentage of the population of "A" mortgagors.

Joseph SmithPresident and CEODefault Mitigation Management

How the current rate cuts and other stats will impact the market

January 24, 2008

Analysis of:Stocks Seek to Extend gains | money.aol.com

The reduction in interest rates is going to have a negative impact on the existing mortgage portfolios due to adverse selection. The decrease in those seeking unemployment benefits is very misleading. The stimulus package is not going to help those in real trouble and will pay some bills for most.

Brian HershkowitzChief Executive OfficerMaximum Value Group

Many More To Benefit

January 24, 2008

Analysis of:Collapse of the Subprime Mortgage Market Shines Spotlight on Risk Management and RiskMetrics | biz.yahoo.com

This article is a very good brief about the RiskMetrics IPO, but doesn't attempt to broadly touch the many areas that are set to shine from recent events in the subprime mortgage market.

Brian HershkowitzChief Executive OfficerMaximum Value Group

Good for today, uncertain for the future

January 23, 2008

Analysis of:Asian markets rebound after Fed cut | news.yahoo.com

It is terrific that one day gains reclaimed much of the territory lost over the various Asian exchanges on Tuesday.  The significance of the instant reaction to the price cut at the Fed's lending window was one of timing.  The question is whether this particular means for economic stimulus will have a long lasting effect.

Brian HershkowitzChief Executive OfficerMaximum Value Group

US Subprime Issues Affect Asian Growth

January 16, 2008

Analysis of:Goldman lowers Asia growth forecast | www.ft.com

The reduction in US consumer spending is hopelessly enmeshed in the availability of mortgage credit, housing prices, and generalized consumer confidence.  The slowdown in the US economy, tied to these three macro forces, will greatly affect both established and emerging markets across the globe.  No where will this be more felt than in Asia.

Joseph SmithPresident and CEODefault Mitigation Management

BOA and Operational Risk

January 15, 2008

Analysis of:Countrywide rescue: $4 billion | money.cnn.com

Over valued versus the risk of litigation, talent flight, legislative constraints, portfolio loss and about every other imaginable variable. Overvalued servicing rights with disappointed servicing investors. Average industry systems, nothing great. Short staffed already. More leaving. Mozillio defineltly a liability and not an asset.

Joseph SmithPresident and CEODefault Mitigation Management

B of A acquires a stomach ache

January 15, 2008

Analysis of:Countrywide rescue: $4 billion | money.cnn.com

While on paper the acquisition versus the valuation of loan servicing looks good, the reality is a whole mess of operational and regulatory risk. The Countrywide CIO was just announced leaving for FIS (Fidelity) and the state of the art systems was one of the selling points in the acquisition. An asset sale will probably be the answer.

Brian HershkowitzChief Executive OfficerMaximum Value Group

Who gets the bigger benefit - Countrywide or the rescuer?

January 14, 2008

Analysis of:Countrywide rescue: $4 billion | money.cnn.com

While many eyes are on the transaction as a proposed bailout for Countrywide, Bank of America will be solving a good many problems for themselves, while purchasing the fuel for tremendous growth.  The advantages for Bank of America are many but the largest are the resolution of their August 2007 investment of 2 billion in Countrywide for a 16% stake now devalued by the market, the availability of a full functioning nationwide sales and fulfillment channel for mortgage loans, the acquisition of a large and highly profitable servicing portfolio, advanced technology, and a top notch executive and management team.

Maureen BoltonPrincipalGlobal Capital Access

Like any proud shopper, Temasek is happy to have recognised a bargain in Merrill

January 7, 2008

Analysis of:Temasek Supports Merrill Despite Sub-Prime Losses | www.bankingtimes.co.uk

This article summarises Temasek's recent equity investment in Merrill, including the price paid and future intentions.  Temasek appears to be more than satisfied with its investment and is inclined toward similar investments (financial institutions undervalued due to over-estimates of subprime/CDO related losses) in the near future.

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