Todays Subprime News

• "Credit Suisse analyst Craig Siegenthaler wrote a client note Friday that ACA had disclosed that it was exposed to approximately $4.5 billion in potentially risky subprime mortgage loans from 2006 and 2007." "The stock nosedived 22.1% Monday , or $1.87, to close at $6.59, making it the biggest decliner by percentage on the NYSE on the day." source: forbes
• "Moody's, for example, made more than 40% of its revenues from rating structured products such as CDOs last year. Marc Dann, attorney-general of Ohio, is investigating whether, in his words, the ratings agencies took part in fraud by bestowing triple-A ratings on structured products created out of subprime loans. Bill Gross, a fund manager at PIMCO, a bond-trading firm, likens the highest-rated tranches of CDOs to a Hollywood madame masquerading as a wholesome, all-American girl." source: economist.com
• "NovaStar Financial Inc. (NFI.N: Quote, Profile, Research), a struggling subprime mortgage lender, said on Monday it will receive up to $150 million of capital from two private equity firms to help it continue operations. " source: reuters
• "Hedge funds are borrowing too much to finance investments in credit derivatives, contracts based on debt, which may magnify volatility in a market downturn, according to a Fitch Ratings survey of 65 banks, insurers and money managers." source: bloomberg
• "Investors searching for value in the beaten-down shares of U.S. home builders should not be fooled: The sector is still in tatters and a durable bottom could be years away. That is the pervasively bearish view of BCA Research Inc.'s Matthew Pugsley. The S&P home-building index has erased three years of gains, and although home builder valuations are now sitting at previous bear market troughs, Mr. Pugsley believes they could fall further." source: ReportonBusiness.com
• "Standard & Poor's (NYSE:MHP) Ratings Services said it placed its ratings of 19 cash flow and hybrid collateralized debt obligation (CDO) transactions on negative watch following its downgrade of subprime RMBS transactions on July 12." source: cnnmoney