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Tom Deutsch Deputy Executive Director American Securitization Forum

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Department of Housing and Urban Development Summit on Housing: Partnering for Responsible Policy October 7, 2008. Tom Deutsch Deputy Executive Director American Securitization Forum. Comparison of 2006 RMBS Collateral Types.

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Department of Housing and Urban DevelopmentSummit on Housing:Partnering for Responsible PolicyOctober 7, 2008

Tom DeutschDeputy Executive DirectorAmerican Securitization Forum

adding public record data shows substantially higher average number of liens per property
Adding public record data shows substantially higher average number of liens per property

Source: LoanPerformance

hfh short sales with 2 nds
HFH/Short Sales with 2nds
  • Do you give existing 2nd ‘equity’/new 2nd?
    • How do you have that future value go into the securitization trusts?
  • Money in a card can be a better present
  • But how do you net present value (NPV) economic and legal right to underwater 2nd?
  • Home prices always go up, right?
    • 2nd has economic value
  • Servicer identifies HFH/short sale opportunity
  • “Split” = foreclosure loss – HFH/Short Sale loss
what of split should 2 nd lien receive if 2 nd is underwater
What % of Split should 2nd lien receive, if 2nd is underwater?
  • Systematic method important for market practice standard
  • Pro rata share of split (by principal balance)
  • OR, value =s all but a dollar of split
  • OR, value =s Expected Value (EV) of 2nd X (pro rata share)
  • EV=Measurement of HPA (Case/Schiller Index)
  • Or just a flat % of principal balance of 2nd
  • Will 2nds accept any of the above?
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