Asset Backed Securities

Bear Stearns has been ordered to pay $275 Million dollars to investors that lost money with Bear Stearns.  According to a recent CNBC.com article, Bear Stearns misled their investors about the true and deteriorating state of the company before JP Morgan purchased Bear Stearns. Bear Stearns was one of the first prominent companies to fail after the housing bubble burst. The settlement discussed in the article comes after a failed criminal trial against two higher up Bear Stearns executives. […]

Behringer Harvard Opportunity REIT I dropped in value at the end of 2011, according to this article from investmentnews.com.  The value per unit of the non-traded REIT went down to an estimated $4.12 per unit value, down from $7.66 a unit value from the previous year. The reduction in value for the Opportunity REIT I was not the only hit Behringer Harvard saw in this most recent evaluation. The Behringer Harvard REIT I dropped in value $5.36 per unit, going from a value of $10 in 2010 to a value of $4.64 in 2011.  Also, the Behringer Harvard Short-Term Opportunity Fund I LP dropped from a value of $6.48 all the way down to $0.40 per share According to this article, many large broker-dealer firms have stopped selling the firm’s Multifamily REIT. There are also many firms that have completely stopped doing business all together with Behringer Harvard. […]

Miles Costello of The Times Online reports that the cloud of uncertainty hanging over the credit markets was thrown into sharp relief yesterday as UBS told investors that it still could not be sure about the full financial impact of the credit crunch. UBS is preparing for writedowns of $13.4 billion (£6.8 billion) against its exposure to the downturn in American sub-prime mortgages. To read the complete article click here.

Alistair Barr of Marketwatch reports that State Street Corp’s decision to set aside $618 million to cover subprime litigation costs has increased concern that insurers offering policies covering such expenses could be hit with big claims from the credit crisis. State Street said the reserve was needed to pay for lawsuits and possible settlements stemming from complaints about the fixed-income strategies managed by its State Street Global Advisors investment arm. The funds were hit by exposure to falling subprime mortgage markets and a lack of liquidity, the company explained. See full story State Street has insurance covering legal costs and expects to get some of the money back from claiming on the policy, Ronald Logue, chief executive of State Street, told analysts and investors during a conference call on Thursday. The value of that coverage wasn’t included in the reserve for accounting reasons, he added. To read the full article click here. […]