From the Financial Times: Wall Street gears up to trade California IOUs
By Nicole Bullock in New York
Published: July 5 2009 23:33

[...]

Wall Street, quick to spot an opportunity, is also gearing up to trade the payment promises. 

“We have a whole team working on it,” said Barry Silbert, chief executive of Second­Market, a company that trades illiquid assets such as bankruptcy claims, private company stock and toxic assets.

Mr Silbert said hedge funds, municipal bond investors and other institutions were interested. Trading volume will depend on how many IOUs the state issues and how long banks accept IOUs for deposit at face value.

[...]

Because the IOUs are to be repaid in just a few months, a buyer now at even 99 cents on the dollar would get an annual yield of more than 7 per cent, said Matt Fabian, managing director at Municipal Market Advisors.

Read the complete story at FT.com

On June 29, 2009, Messrs. Jaime Caruana (BIS General Manager) and Stephen Cecchetti (Economic Adviser, Head of Monetary and Economic Department) answered questions touching a wide range of forward-looking regulatory and structural concerns at the Annual General Meeting of 2009 press conference.

(44 minutes)

See also: General Manager’s statement, as read at the AGM press conference.

Related information

• Annual General Meeting 2009
• BIS Annual Report 2008/09

Click here for FAQs

Freddie Mac information and resources for homeowners is found here.

Also read: Home Affordable Refinance Expanded – 125 Percent LTV Limit

Highlights from Fannie Mae’s Selling Guides Announcement 09-23: 

Introduction 

The Home Affordable Refinance initiative, which includes the Refi Plus™ and DU Refi Plus™ options, is designed to assist borrowers who have demonstrated an acceptable payment history on their existing Fannie Mae mortgage loan, but due to a decline in property values have been unable to refinance to obtain a lower payment or move to a more stable product. 

With this Announcement, Fannie Mae is continuing its commitment to find ways to allow more borrowers to refinance by increasing the maximum allowable LTV ratio to 125 percent for mortgage loans that qualify for the Refi Plus (manual underwriting) option. 

Maximum LTV Ratio for Refi Plus (Manual Underwriting) 

Fannie Mae is increasing the maximum LTV ratio for Refi Plus to 125 percent. There continue to be no limits on the CLTV or HCLTV ratios. Specific requirements apply to Refi Plus loans with LTV ratios above 105 percent as outlined below. 

Eligible Products 

Refi Plus loans with LTV ratios above 105 percent are limited to fully amortizing fixed-rate 30-year mortgages (specifically terms greater than 15 years up to 30 years). 

[…] 

Required Borrower Benefit  

As stated in Announcement 09-04, Home Affordable Refinance – New Refinance Options for Existing Fannie Mae Loans, the borrower must receive a benefit in the form of either a reduced monthly mortgage payment (principal and interest) or a more stable product (e.g., move to a fixed-rate mortgage from an ARM). This borrower benefit requirement continues to apply to Refi Plus loans with LTV ratios above 105 percent. In general, lenders are encouraged to provide fixed-rate mortgages to borrowers whenever possible (and required to provide fixed-rate mortgages for LTV ratios above 105%), including loans with shorter terms. Moving from a 30-year term loan to a 20- or 25-year term is considered a more stable product and meets the borrower benefit requirement. As a reminder, when the borrower’s new mortgage payment is increasing compared to the existing mortgage payment, the borrower must not have any 30-day delinquency on the existing mortgage in the lesser of 12 months or the life of mortgage loan.

[…]

Effective Date

Refi Plus mortgage loans with LTV ratios that exceed 105 percent are eligible for whole loan and MBS delivery on or after September 1, 2009.

To learn if your loan is owned by Fannie Mae of Freddie Mac, complete the loan lookup forms on each of their websites (click images).

 Resources: 

• Announcement 09-23 (.pdf)
• Refi Plus Pricing Matrix (.pdf)
• LLPA Matrix and AMDC Information – Standard (.pdf)
• Home Affordable Refinance FAQs (Updated) (.pdf)
• FHFA News Release (.pdf)
• HUD News Release (.pdf)

Coverage/Blogs:

• HousingWire: Home Affordable Refinance Eligibility Expanded to 125 Percent LTV
• L.A. Times Blog: U.S. raises home refi plan’s loan-to-value ceiling to 125%

(Update 1: 07/17/2009)

New August 1 Date for Whole Loan Committing of Refi Plus Loans Up to 125 Percent LTV
(Source: Fannie Mae)

To help lenders get started with originating Refi Plus™ loans under the manual underwriting option with LTV ratios of 105.01-125 percent, Fannie Mae will make this option available for whole loan committing beginning August 1 – one month sooner than the September 1 date included in Announcement 09-23: Updates to Home Affordable Refinance – 125 Percent LTV Limit for Refi Plus Loans.

We are providing this advance ability for whole loan committing to address lenders’ needs to obtain secondary market pricing information so they can establish their own pricing for loan originations.

Fannie Mae lenders may use both eCommitting™ and  eCommitONE™ to commit Refi Plus loans with LTVs over 105 percent beginning August 1, and we will accept both whole loan and MBS deliveries of Refi Plus loans with LTVs up to 125 percent beginning on September 1. 

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— CASC Admin