A mortgage-backed security (MBS) is a type of asset-backed security which is secured by a mortgage or collection of mortgages. The mortgages are aggregated and sold to a group of individuals that securitizes, or packages, the loans together into a security that investors can buy. Bonds securitizing mortgages are usually treated as a separate class, termed residential; another class is commercial, depending on whether the underlying asset is mortgages owned by borrowers or assets for commercial purposes ranging from office space to multi-dwelling buildings.
A collateralized debt obligation (CDO) is a type of structured asset-backed security (ABS). Originally developed as instruments for the corporate debt markets, after 2002 CDOs became vehicles for refinancing mortgage-backed securities (MBS). Like other private label securities backed by assets, a CDO can be thought of as a promise to pay investors in a prescribed sequence, based on the cash flow the CDO collects from the pool of bonds or other assets it owns. Distinctively, CDO credit risk is typically assessed based on a probability of default (PD) derived from ratings on those bonds or assets.
National City Corporation was a regional bank holding company based in Cleveland, Ohio, founded in 1845; it was once one of the ten largest banks in America in terms of deposits, mortgages and home equity lines of credit. Subsidiary National City Mortgage is credited for doing the first mortgage in America. The company operated through an extensive banking network primarily in Ohio, Illinois, Indiana, Kentucky, Michigan, Missouri, Pennsylvania, Florida, and Wisconsin, and also served customers in selected markets nationally. Its core businesses included commercial and retail banking, mortgage financing and servicing, consumer finance, and asset management. The bank reached out to customers primarily through mass advertising and offered comprehensive banking services online. In its last years, the company was commonly known in the media by the abbreviated NatCity, with its investment banking arm even bearing the official name NatCity Investments.
Commercial mortgage-backed securities (CMBS) are a type of mortgage-backed security backed by commercial and multifamily mortgages rather than residential real estate. CMBS tend to be more complex and volatile than residential mortgage-backed securities due to the unique nature of the underlying property assets.
The secondary mortgage market is the market for the sale of securities or bonds collateralized by the value of mortgage loans. A mortgage lender, commercial bank, or specialized firm will group together many loans and sell grouped loans known as collateralized mortgage obligations (CMOs) or mortgage-backed securities (MBS) to investors such as pension funds, insurance companies and hedge funds. Mortgage-backed securities were often combined into collateralized debt obligations (CDOs), which may include other types of debt obligations such as corporate loans.
In finance, subprime lending is the provision of loans to people in the United States who may have difficulty maintaining the repayment schedule. Historically, subprime borrowers were defined as having FICO scores below 600, although this threshold has varied over time.
The American subprime mortgage crisis was a multinational financial crisis that occurred between 2007 and 2010 that contributed to the 2007–2008 global financial crisis. The crisis led to a severe economic recession, with millions of people losing their jobs and many businesses going bankrupt. The U.S. government intervened with a series of measures to stabilize the financial system, including the Troubled Asset Relief Program (TARP) and the American Recovery and Reinvestment Act (ARRA).
Residential mortgage-backed security (RMBS) are a type of mortgage-backed security backed by residential real estate mortgages.
FBR & Co. was a capital markets firm headquartered in Arlington, Virginia. Founded in 1989 by Emanuel J. Friedman, Eric F. Billings, and W. Russell Ramsey, the company provided investment banking, merger and acquisition advisory, institutional brokerage, and research services through its subsidiaries FBR Capital Markets & Co. and MLV & Co. FBR focused capital and financial expertise on the following industry sectors: consumer; energy & natural resources; financial institutions; healthcare; insurance; industrials; real estate; and technology, media & telecom. FBR was based in the Washington, D.C. metropolitan area with offices throughout the United States. In 2017 the company was sold to B. Riley Financial for $160.1 million.
Eric Francis Billings is an American businessman and financier who has served as the chairman of Arlington Asset Investment since June 2006. Arlington Asset Investment Corp. was previously known as FBR Capital Markets Corporation prior to 2009.
Chain of Blame: How Wall Street Caused the Mortgage and Credit Crisis is a 2008 book about the subprime mortgage crisis in the United States by investigative journalists Paul Muolo of National Mortgage News and Mathew Padilla of the Orange County Register. The book has an accompanying website with some excerpts, author biographies and a roundup of events in the subprime mortgage crisis that occurred after the book was printed.
This article provides background information regarding the subprime mortgage crisis. It discusses subprime lending, foreclosures, risk types, and mechanisms through which various entities involved were affected by the crisis.
The U.S. subprime mortgage crisis was a set of events and conditions that led to a financial crisis and subsequent recession that began in 2007. It was characterized by a rise in subprime mortgage delinquencies and foreclosures, and the resulting decline of securities backed by said mortgages. Several major financial institutions collapsed in September 2008, with significant disruption in the flow of credit to businesses and consumers and the onset of a severe global recession.
Ocwen Financial Corporation is a provider of residential and commercial mortgage loan servicing, special servicing, and asset management services, which has been described as "debt collectors, collecting monthly principal and interest from homeowners". Ocwen was founded in 1988 by William Erbey and is headquartered in West Palm Beach, Florida, with additional offices in Mount Laurel, NJ, Rancho Cordova, California, and St. Croix, U.S. Virgin Islands. It also has support operations in the Philippines and India. Ocwen's Slogan is "Helping Homeowners Is What We Do."
Starwood Capital Group is an investment firm headquartered in Miami Beach, Florida. It is managed by Barry Sternlicht. It was co-founded by Sternlicht and Robert Faith in 1991. In 1993, Faith left Starwood to found Greystar Real Estate Partners.
Many factors directly and indirectly serve as the causes of the Great Recession that started in 2008 with the US subprime mortgage crisis. The major causes of the initial subprime mortgage crisis and the following recession include lax lending standards contributing to the real-estate bubbles that have since burst; U.S. government housing policies; and limited regulation of non-depository financial institutions. Once the recession began, various responses were attempted with different degrees of success. These included fiscal policies of governments; monetary policies of central banks; measures designed to help indebted consumers refinance their mortgage debt; and inconsistent approaches used by nations to bail out troubled banking industries and private bondholders, assuming private debt burdens or socializing losses.
The 2007–2008 financial crisis, or Global Financial Crisis (GFC), was the most severe worldwide economic crisis since the Great Depression. Predatory lending in the form of subprime mortgages targeting low-income homebuyers, excessive risk-taking by global financial institutions, a continuous buildup of toxic assets within banks, and the bursting of the United States housing bubble culminated in a "perfect storm", which led to the Great Recession.
Pine River Capital Management L.P. is an asset management firm. The firm trades stocks, fixed income, derivatives and warrants. As of 2018 the company manages approximately US$7 billion across three actively managed platforms: hedge funds, managed accounts and listed investment vehicles to support a number of strategies including interest rates, mortgages, equity long/short, event-driven equity, and global convertible bond arbitrage. The company is currently managed by founder and CEO Brian Taylor and 6 partners.
Fremont General Corporation was a Santa Monica, California based holding company for Fremont Investment & Loan, an industrial bank that was one of the largest subprime mortgage lenders in the country during the early and mid 2000s.
$26 million (2021)