December 2015 Remittance – More Observations

Happy 2016

We start off 2016 looking at called deals, and two in particular (FBRSI 2005-1 and MLMI 2005-HE2) that initially make no economic sense.

Deals Called – December 2015

We go into great detail describing the timeline of events that led up to the termination of FBRSI 2005-1 by Assured Guaranty. Wells Fargo CTS Link has 12 special notices posted relating to this event. Unfortunately, no notices exist for MLMI 2005-HE2 and we relied on the prospectus supplement for any clue as to who terminated this trust. However, before we start those stories, we discovered another loan that just went into REO with a story that should make Brad Pitt think twice as to who to blame for families losing their savings and their homes. As the judge in the Connecticut Superior Court stated, “The real culprit was their own short-sighted fiscal indiscipline, year after year, basing their lifestyle upon the vagaries of commission income, his and hers.” That lifestyle was supported by eight refinances resulting in over $1.2MM in equity converted into cash. Finally, once again, we discuss those sold REOs that are still sitting in the deal with a positive UPB and no loss. 2016 has to be the year this situation gets resolved. Don’t miss reading the “demolished” story on page 16.

In case you haven’t seen it already, we are including as an attachment the “The Allocation of the Countrywide Settlement Payment to Covered Loan Groups pursuant to Settlement Agreement” that was just released.

Sections in today’s commentary

Reason for Default: “The family debt situation is horrendous”
FBRSI 2005-1: Assured declares the notes to be immediately due & payable
Called? - Merrill Lynch Mortgage Investors Trust Series 2005-HE2
Sold REOs still in Deal - Ocwen serviced
Demolished - A REO that had been demolished and sold and is still in the Trust: AHM 2005-1 Group 2
Delinquency by Pool Type, FRM/ARM, Vintage
CPR/CDR/Severity/MTL by Pool Type, FRM/ARM, Vintage