It took a year and billions in government bailout bucks, but the monster known as the mortgage-backed securities market is twitching.
Developers Diversified Realty Corp. sold its 2009-DDR1 (Frankenbond) today, $400 million worth of the very paper that helped sink the economy. The five-year bonds are backed by 28 malls in 19 states.
Will the world again be ravaged by MBS monsters stalking financial centers around the world? Not if they need federal financing. Frankenbond is the first CMBS deal eligible for TALF money, and the program expires tomorrow.
Meanwhile, on the residential mortgage front, the Fed has moved to stamp out the practice of selling mortgages without telling the borrower. An interim rule, which becomes mandatory in 60 days, requiring notification when a mortgage loan is sold or transferred, was approved today.
Developers Diversified Sells Commercial Mortgage Debt [Bloomberg]
Fed sets interim mortgage sale disclosure rule [Reuters]